Netflix bans gambling and cryptocurrency ads in new business plan

Posted on: September 6, 2022, 10:56 a.m.

Last update on: September 6, 2022, 04:05h.

To stem its financial haemorrhage, Netflix is ​​preparing a new business model that includes advertisements. But when the streaming platform introduces its new ad-supported tier, it likely won’t have any gaming, political, or cryptocurrency ads.

Netflix and CEO Reed Hastings
netflix CEO and co-founder Reed Hastings promoting his company. The company is introducing a new ad-supported tier, but says it won’t include gaming or cryptocurrency ads. (Image: Getty Images)

The introduction of the ad-supported tier is a means to an end. Netflix is ​​looking for ways to attract new customers, hoping offering a lower priced package will help. Initial reports indicate that the new tier will cost around $7-9 per month. Those who don’t want ads will have to keep paying more.

The decision to exclude certain types of advertisements is not due to an altruistic or moral reason. Instead, it’s because these industries face more regulatory ambiguity than others.

The scheduled launch date for Netflix’The ad-supported model was originally slated for release in early 2023. However, it has evolved to compete Disney+. The latter will launch its own ad-supported plan on December 8.

New netflix The subscription plan will be available from November 1 in various countries including Australia, US, Canada, UK, Germany and France. netflix stagger deployments. But the platform that once boasted of being completely ad-free will no longer exist.

Ban ads

Other companies have also canceled these political and gaming ads due to lack of regulation. Facebook banned sports betting and crypto ads before allowing them in certain regions for the past two years.

In 2019, Alphabet, the parent company of Google, lifted the ban on sports betting ads in certain jurisdictions, such as the United States. Two years later, it began allowing cryptocurrency-related advertisements, allowing exchanges and wallet providers to promote their services on the search engine.

This move did not always go well. Last month, Italy fined Google 1.45 million euros ($1.47 million) after showing gambling ads on YouTube. This was after the company reportedly reinstated a ban on the content.

Due to differing views on certain types of ads, Netflix will take a hands-off approach in certain industries. Even with the ad-supported tier, the platform is said to be flexible. It would consider not including commercials in its original content or during some children’s shows.

Subscriptions down, revenue up

Advertising is one of the biggest money makers and how many streaming platforms make money. However, Netflix has tried for years to avoid going the ad-supported route. Co-founder, chairman and CEO Reed Hastings bragged about Netflix’s ad-free stance two years ago.

He claimed it was the “best capitalism”, adding that making money from advertising is hard work.

But as recently as January, he repeated the company’s opposition to the ads. In March, his position began to change. Hastings then claimed in April that an ad-supported tier made sense because it gave consumers options.

During the first quarter of the year, the company lost 200,000 subscribers. It again lost 970K in the second quarter. But declining subscribers didn’t significantly reduce its revenue, despite having no ad-supported tier or ads. Company data compiled by Macrotrends shows annual revenue of $20.15 billion in 2019, a 27% increase from the previous year. Last year it was $29.69 billion.

In the second quarter of this year, Netflix’s revenue was $7.97 billion, an increase of 8.56% year-on-year. The company is therefore still in the right direction. His net income also increased. From 2018 to 2019, it jumped 54%. From 2019 to 2020, it exploded by 85.58%.

Netflix continues to make money, posting a net profit of $1.44 billion for the second quarter. This is an increase of 6.5% over last year.

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