Netflix plans to stop advertising during children’s shows

Anonymous sources close to Netflix told Bloomberg that the company intends to completely eliminate ads during the broadcast of children’s content. A number of copyright holders already prohibit doing so, so the step does not seem critical for the platform’s advertising earnings, which is developing a new service for managing advertising flows.

Netflix plans to stop advertising during children’s shows

How writes agency, the company is still working on the strategic and technical details of ending advertising in children’s programs and films, but the decision has already been made in principle.

Netflix is ​​currently developing a new ad service that will allow the company to diversify how it earns from paid ads. And if there will be no advertising during children’s programs, then in other broadcasts it will appear in new variations.

The company can now only show commercials within its own content, and other copyright holders must obtain permission to do so.

Many do not give such permissions (in addition to producers of children’s content, most film studios, as well as independent directors, do not want advertising in their new films).

Netflix is ​​actively negotiating with major providers to be able to show ads during the broadcast of their products (and not only after, as now).

Sources report attempts to buy content from Sony Group Corp., Paramount Global, Warner Bros. and Discovery Inc. 10-15% more expensive to get advertising rights.

Interspersed with ads will generate $3-4 billion a year while lowering subscription costs for thrifty viewers. If desired, consumers will be able to purchase packages without ads.

It is now important for the company to attract a new audience, since it has lost a lot of subscribers since the beginning of 2022. The service’s shares have fallen 65% since the end of November 2021.

Walt Disney Co., Netflix’s biggest competitor in pay-per-view streaming, is also working on a new ad service for Disney+. Hulu, which is majority owned by Disney, already has an ad-supported version.

Both Disney and Netflix plan to show fewer ads online than viewers see live or on most streaming services. At the same time, they intend to charge a higher fee for videos than the market average.

According to industry experts, Netflix, without all these innovations, could earn enough from advertising solely within its own content. And therefore they see in the creation of a new advertising service a hint of a desire to build a big business.

Microsoft is expected to provide technical support for the platform in advertising sales. At least at the initial stage.

If successful, Netflix will likely move ad sales into a separate business line. The corporation is already looking for sellers and the head of the future advertising service.

Cover photo: Mollie Sivaram / Unsplash

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