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The current global economic climate poses a difficult time for all and the technology sector is no exception. While firms specialising in hardware are struggling to arrange components such as semiconductor chips, motherboards and cameras, the subscription space has problems of its own.

Streaming companies are unable to retain consumers as users look to cancel subscriptions in the face of rising costs.

Energy and food prices are soaring all over the world and financial advisors as well as governments of many nations are advising public to cut non-essential expenditure which is directly hitting the a few sectors included audio and video streaming.

As a result, streaming platforms are rushing to reposition and release subscription tiers that won’t be costly and retain consumers as well.

Recently, Netflix introduced a cheaper price tier for its users but there is a catch - it comes with advertisements.

This is a concern because ads are one of the most hated features in the digital space. Hence, it is surprising that a company would float an option for users that include them.

Amazon Prime also has advertisements in all tiers and it’s possible that Netflix took cues from its success before taking the decision. Hiking prices at this point would have meant a steep decline in Netflix users therefore this is the option that the firm came up with.

Either way, video-streaming fans should now brace for a future full of advertisements because it is becoming inevitable and even a streaming giant like Netflix seems to have accepted this fact with its new price tier.

Netflix names Microsoft as partner for ad-supported subscription plan

Other companies are also expected to follow suit and soon, everyone would be floating an affordable ad-supported price slab.

A similar trend was observed when most smartphone giants removed headphone jacks and charging bricks right after Apple announced that it would no longer include these two items in their phones.

On the other hand, YouTube is also testing 7-10 ads before the start of a video apparently to force consumers to purchase its premium membership.

YouTube is notorious for its ad strategy as the company leaves no stone unturned to broadcast force them onto consumers in a variety of ways.

By the time the users find a way around, the company adds new strategy to show them. Initially, YouTube showed one ad before a video but now, they pop up multiple times in long videos. If it implements the 7-10 ads per video strategy, consumers will surely be vexed.

This will further enhance the popularity of ad-blockers. Lately, ad-blocking applications have done a good job of identifying and blocking applications and with companies turning to ads to continue their business. These applications, it seems, will be everyone’s go-to place.

Netflix subscribers fall for first time in a decade, shares plunge 24%

Moreover, with the kind of variable quality seen in content these days compared to few years ago, users see no benefit in retaining subscriptions to streaming services, especially on multiple platforms, as streaming wars continue vying for a bigger share of viewership.

Few have resorted to sharing accounts and passwords with friends that results in a win-win scenario for all parties involved. Others are cancelling their subscriptions right away, instead purchasing a month’s access if they want to watch a particular show.

Additionally, Netflix is trying to crack down on sharing of passwords, which posits another threat to its users, especially those password-sharing liberally.

At the end, the illegal option of piracy will remain available for customers. The benefit of pirated content for users is that it is a seamless and ad-less experience. Moreover, people don’t shy from flocking to it particularly at the current time when the subscription rates are spiking with no possibility of price cuts on the horizon.

Netflix has seen a decline in the number of its users over the past few months and it seems unlikely that users that have discontinued the service are not watching its series through illicit means.

Moreover, Netflix seems to have attained a short-term peak of subscribers during Covid-19 which was unlikely to continue after economies re-opened. The company, however, seems to have not accepted this reality as it is trying to keep numbers pumped up and introduced new schemes to retain consumers.

Netflix and Disney poised to shake up TV ad world

Either way, with Neflix’s latest move, the future of streaming, it seems, has advertisements on the horizon.

The article does not necessarily reflect the opinion of Business Recorder or its owners

Omar Qureshi

The writer is a Senior Sub Editor at Business Recorder (Digital)


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