It's the long term future of all streaming. After they increase subscription prices and their subscriber growth stops, they will still need to increase revenue.

So they will sell ads. In 20 years streaming will look like cable TV.

And then, someone will invent bit torrent, completing the cycle.

In some countries torrenting is limited or even actively tracked and there may be legal consequences to doing it.

Sneakernet

You’re joking, right?

less than 20 years i think

If Netflix starts selling ads then only Netflix executives will watch the shows, everyone else will cancel their subscriptions.

I'm happy to go back to using BitTorrent for everything if they insist on making the experience of paying for shows worse than pirating them.

Yeah, the quality of a lot of Netflix shows just feels inferior to other platforms.

You say that but people have been watching cable TV for decades.

Maybe the key point being that they are a different audience, Netflix users seek something else.

Copy cable TV business plan and theses users will just migrate elsewhere. Way to shot on your own foot.

Speaking of cable, if the quality of Netflix produced content would be comparable to the one of hbo or Disney I would even consider paying for it and watch ads. But I think Netflix subscriptions are going down because m, at least in my personal experience, the content is just offensively stupid, banal, childish and poor. Maybe the first step should be to product stuff that makes sense

I'm guessing you aren't a schumer fan

https://www.rottentomatoes.com/m/amy_schumer_growing This? I don't have netflix anymore for a couple of years, so I wasn't aware of this.. but I would say that if I did, I wouldn't be a fan of this ;o

But that’s clearly not what’s happening here, even if you disagree with the idea.

The title is consistent with the contents of the article. The contents of the article are not deliberately terrible, in fact they’re not terrible at all.

This isn’t any other writer. This is Stratechery, damn it. It’s Ben.

Classic kneejerk emotional reaction.

Doesn't mean their stuff can't suck. Like this article. Which sucks.

I disagree, it doesn't suck.

You need to seperate personal distaste for advertisement and objective analysis / business strategy. I hate ads as much as anyone, but I don't think the article sucks. Quite the opposite actually.

If I were an investor in Netflix, I would vote for this.

You're entitled to your opinion. And my opinion is that yours sucks.

On HN we normally try to avoid such shallow dismissals. Can you explain why his opinion sucks?

It depends when you want to sell your stock.

If Netflix goes too in for "background" with "ads", it will be watered down and completing with other Hollywood cops and TikTok alike. Too many completing concerns and it won't be able to serve all markets well.

So sure it could look good in the interim, and many corporate strategies do.

I get why Stratechery likes it on some level. Slaying the sacred cow here is like Intel deciding to do the iPhone as ARM. Put I think it's different, in that Intel was first in the lead and so would be good at a lower margin iPhone business, whereas Netflix has no real advantage over TikTok and whatever other background content competitors already exist.

Perhaps we should be looking at the strongest possible version of Stratechery’s argument (which also seems to be the one they presented).

Stratechery suggests that:

> markets like India have more room to grow, but much lower household incomes, and Netflix’s relatively high prices have been an obstacle.

> advertising-supported or subsidized tier would expand Netflix’s subscriber base, which is not only good for the company’s long-term growth prospects, but also competitive position when it comes to acquiring content.

>This also applies to the company’s recent attempts to crack down on password sharing, and struggles in the developing world: an advertising-based tier is a much more accessible alternative.

>[Ad-supported plans] would provide an alternative for marginal customers who might otherwise churn, and on the other hand, it would create a new benefit for those willing to pay (i.e. no advertising for the highest tiers).

Free tier vs paid tier always made perfect sense in theory, but what industry has actually pulled this off?

Newspapers? Hah. Spotify? Perhaps.

The problem with capital-gains-driven investment is Netflix can't just sit semi-sustainability at a steady share price and just pay out a dividend. Instead we're likely to see all sorts of jerking around until the business shoots itself in the foot.

Without getting to "rate of profit tends to fall-y" the goal of a business, rather than its owners, should be to become a utility.

Low margin, boring, ubiquitous, essential.

This is the highest award society bestows on a good service.