How brands benefit from the decline in Netflix subscriptions

Oonagh Rusling, Comms Planning Manager


Netflix have announced that for the first time in 10 years they are seeing a decline in subscriptions and expect this to fall further, down by 2.5m this quarter.

Due to the cost-of-living crisis people are looking for more ways to save and the no commitment contract of Netflix and other streaming services are the first luxury to go. In an attempt to counter act this, Netflix have said they will be cutting down on shared accounts as well as introducing an advertising supported version.

This is great news for agencies and brands who, since the rise of Netflix, have been desperate to advertise as close to the platform and content as possible to capture those ad avoiding consumers, difficult to reach elsewhere. We can expect the CPMs to be the most expensive in the market which will not deter those bigger brands who have endless ad revenue but perhaps might price out medium and smaller brands.

It will be interesting to see how many people sign up to the ad supported version; audiences don’t accept change well and whilst we are used to seeing ads on the likes of ITV, C4 and Sky, the introduction of ads on Netflix might feel unnatural and invasive compared to the usual viewing experience.

A benefit we do hope to see is increased viewing across more traditional, free to watch AV platforms; perhaps not a huge increase in linear as on demand consumption is the new normal for many audiences but BVOD should reap the benefits of increased viewing and hopefully spur on the saleshouses to invest more – such as more granular targeting and more insights post campaign.

As video viewing evolves a holistic plan continues to blur the lines between AV and Digital teams but with Digital teams able to report on many more metrics BVOD needs to step up its game to make the most of increased viewing figures.