Netflix's subscribers in Australia will soon be shown ads before or in between shows. This could happen before the year ends as the streaming giant looks for avenues to boost growth in the midst of slow growth, The Sydney Morning Herald reports.
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New business
According to Australian local media, Netflix has begun talks with some advertisers about its intention to roll out unskippable ads before the start of an episode or film. The company had indicated earlier in the year, plans to introduce a version of its services which is supported by advertising.
The new business model will work by having people pay more to avoid seeing ads. If you choose to downgrade, you will have to sit through ads while you watch your show, Bloomberg reports. A Netflix spokesperson said the company was still making decisions on how to launch.
We are still in the early days of deciding how to launch a lower priced, ad-supported option and no decisions have been made. This is all just speculation at this point.
Joining the bandwagon
Industry watchers in Australia say the advertising tier is expected to launch as early as November, and slots will be available to national clients only. Netflix has also reportedly decided it will not be selling advertising slots to political, gambling and cryptocurrency businesses and will not market any products to children. It is still considering restrictions on pharmaceuticals, according to sources.
Netflix is not the first streaming service to offer an advertising option. The streaming giant is clearly taking a cue from rival services such as Paramount, Hulu and Amazon Prime Video. Netflix co-CEO Reed Hastings said during a May earnings call interview call few months ago:
It's pretty clear that [this model] is working for Hulu. Disney's doing it. HBO did it. I don't think we have a lot of doubt that it works. All those companies have figured it out, I'm sure we'll just get in and figure it out.
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