Free Netflix? More Ads on Amazon? Could It Really Happen?

As the holiday season draws near, with Mariah Carey’s seasonal emergence on the horizon, streaming platforms are doubling down on their efforts to retain existing customers and attract new ones.

Could Netflix Offer a Free Version?

Netflix has recently phased out its ad-free Essential plan and is exploring the possibility of a free, ad-supported version. This isn’t exactly breaking news, as the company has previously experimented with a completely free model in select countries before discontinuing it. However, in a recent interview with Les Échos, Greg Peters, Co-CEO of Netflix, revisited the topic.

According to Peters, there is “immense potential for growth at Netflix” and, like any service company, they are always looking for new avenues of growth. These include integrating and leveraging artificial intelligence, expanding into video gaming, and streaming exclusive live sports events.

Focusing on the ad-supported free service option, Peters shared his reservations about its sustainability and viability long term. He acknowledged the significant role advertising could play in Netflix’s revenue streams but expressed doubts about shifting to a business model purely based on advertising. Instead, he prefers a more balanced and diversified approach, one that could potentially offer a hybrid model catering to various consumer demands. Unlike companies such as Meta, Netflix’s primary revenue source remains its subscription model, not advertising.

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Is Amazon Amping Up Its Ad Game?

Meanwhile, Amazon understands the significance of advertising. Since April 9, ads have been included on Prime Video in France to ensure a steady revenue stream for procuring compelling new shows. The basic user subscription still stands, allowing viewers to opt out of ads for an additional 1.99 euros per month.

This option may become even more appealing in the near future, as Amazon plans to significantly increase the number of ads. In an article in the Financial Times, Kelly Day, Vice President of Prime Video International, hinted at a modest increase in ad volume by 2025, though specifics were not disclosed.

The format of these advertisements could vary, ranging from ads at the start of each video, periodic interruptions within an episode (similar to traditional TV commercial breaks), or through a carousel within the user interface. Ads might also appear when a video is paused. Essentially, Amazon is exploring all available avenues to integrate more advertising into its streaming service.

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The strategies unfolding at Netflix and Amazon highlight the evolving landscape of streaming services, where balancing user experience with revenue generation through ads is becoming increasingly crucial.

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