Patrick Johnson, global chief executive officer, Hybrid Theory, has a theory about how the difficult times ahead for Netflix will boost the wider performance of the connected TV (CTV) space.



After Netflix posted its first subscriber loss in a decade, the ‘great resignation’ saw the subscriber gains of the pandemic go into freefall. In addition to Warner Bros Discovery’s decision to shut down CNN+ weeks after its launch, the wake-up calls for the streaming industry are becoming more acute.

In all of this, there may be an upside here for digital advertising. In a world where trust in advertising has never been lower, and its very value is being questioned, the news that Netflix is finally embracing advertising is an opportunity for marketers to add further impetus to an already booming CTV market.

Two is better than one.

With Netflix announcing its plans to introduce a lower-cost, ad-supported service, we’re reminded that content subscriptions do not necessarily omit the exposure to ads. They are two different income streams for providers, but both have just one objective – driving revenue – and future income growth lies in embracing both. Ultimately, continuous subscriber growth is impossible, and every TV subscription service has its own ceiling. When this is reached, advertising moves center-stage, becoming a critical part of any broadcaster’s long-term strategy.

Also published in: The Drum

Podcasts powered by AudioHarvest