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).
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.
Low margin, boring, ubiquitous, essential.
This is the highest award society bestows on a good service.
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.