What do I mean by that? Well, Netflix’s licenses are all dependent on the shows being shown without any ads. That means that shows it has licensed from Sony, Warner Bros. Discovery, Universal and others, will need to have the terms adjusted to show ads. Otherwise, Netflix could lose out on a lot of cash, from some of those popular shows that it has, like NCIS and Breaking Bad. This needs to happen, as studios could also want a cut of the ads, from 15% to 30%. Which would put them right in line with the cut that Google takes from ads on websites and YouTube. And has become the industry standard. This will be a lot more profitable for both streaming services and the studios making the content. There’s a reason why just about every other service offers an ad-free and ad-supported tier now.
How will this affect me?
As a subscriber, this really won’t affect you. But, it could limit how low Netflix could make the ad-supported tier cost. If they are not able to get ads on a lot of its licensed content, that means less money that would offset the monthly price. While Netflix does have a lot of Originals already, a good amount of its library is licensed from other studios. And Netflix does have to play by their rules. Netflix has not yet announced pricing for its ad-supported tier. But we are expecting it to be under $10 per month. Likely closer to $7. But this will also depend on if they do an ad-supported tier for each of their three current plans, or just one that is similar to their “Standard” plan but with ads. Still a lot of questions with Netflix and ads.
