Streaming platform lost nearly 1 million subscribers in the second quarter
Netflix estimates the launch of the business model with ads for the beginning of 2023. The information was revealed in a letter to investors this Tuesday (19) when communicating the results of the second quarter, when it lost 970 thousand advertisers. The number is lower than the one projected in April, 2 million.
According to the platform, the offer with advertising will be complementary to existing plans and seeks to serve a specific segment of users.
The model should be rolled out first in markets where ad spend is most significant. And, after validation and adjustments, cover other countries and regions.
The goal, according to the company, is to offer a proposition that is better than what is currently available from linear TVs, “more transparent and relevant to consumers and more effective for our advertising partners.
In the document, he recognizes that the process must take time to produce results, but believes that, in the long term, the model can guarantee substantial incremental adherence, with lower prices, and profit growth, from the revenues generated with the ads.
Context
After the loss of 200,000 subscribers in the first quarter of this year, the first drop in 10 years, the platform began to air the possibility of having cheaper models and ads – something it always avoided – to deal with the more turbulent scenario, impacted by macroeconomic and political challenges and increased competition.
Last week, it announced Microsoft as a partner for ad solutions. “We are excited about the opportunity, given the combination of our highly engaged audience and high-quality content, which we believe will attract premium CPMs from branded advertisers.”
Re-accelerating our revenue growth is a big challenge. But we’ve been through hard times before. We built this company to be flexible and adaptable and this will be a big test for us and our high performance culture.
We are fortunate to be in a position of strength as a leader in entertainment streaming by all metrics (revenue, engagement, subscribers, profit and free cash flow). We are confident and optimistic about the future.
