Starting on November 3, Netflix will introduce an advertiser-supported price tier. For the low price of $6.99 a month, you can (perhaps) watch episodes of your favorite show, and there may or not be a 15 or 30 second long ad in it. It depends on the show, as some material won't have ads due to various restrictions and licensing deals, so some won't be on the ad-supported tier.
The streaming industry has been resistant to advertising for a variety of reasons, partly because it can be tricky to figure out how the deals with various film studios will work. Does Netflix (NFLX) now have to share a portion of its advertising revenue with, say, Comcast (CMCSA )for "The Good Place?"
Is it possible that the process of tailoring these licensing agreements for the paid tier could be so onerous, and the prospect of sharing revenue so unappealing, that the ad-supported version of Netflix would only consist of Netflix's original content, and no popular library material? If that's the case, is there anyone would want to pay for such a service? (Besides people who've really been meaning to get caught up "The Umbrella Academy," of course.)
But Netflix won't be alone in taking the leap. Hulu has long had an-supported tier that doesn't have any known content restrictions, as the company presumably ironed out those wrinkles long ago. NBCUniversal's Peacock launched with both a free tier and a paid tier, which includes either few or no ads, depending on the option, and also had access to exclusives like the third and fourth season of the cult comedy "A.P. Bio," which weren't available with the free option.
Both Disney+ (DIS) and HBO Max (WBD) will launch ad-supported tiers soon. Will they also have similar restrictions? Disney doesn't have much on the service that it didn't produce in-house, and while HBO Max's content library is largely populated with material from across the Warner Bros. Discovery portfolio, it does have non-Warner films as well. But will those be inaccessible with the paid tier? We'll just have to see.
TheStreet broke down why this happened, and what it says about the streaming industry at the moment. Was a move towards an ad-supported model inevitable, or could it have been avoided if it made better shows?
But what does everyone else think? Well, if Twitter is any indication, people have lots of thoughts about this development. And jokes. They also have lots of jokes.
It's not so much that anyone cares about the Netflix brand being devalued--Netflix doesn't pitch itself as an elevated, highbrow cultural product the way HBO once did. People mainly think it's just a silly move that seems a bit desperate, and proof that the streaming revolution has now just become plain old television, and the days of paying for several premium channels to watch everything are now back, and more firmly entrenched than ever.
Or as Dave Itzkoff, a New York Times writer known as one of the sharpest wits on social media, put it, it seems like the move by a CEO who doesn't really understand what their product is supposed to be.
Overall, this is a big moment for the people who love to remind you to hold onto your physical media.
