Two top Snap managers to manage the advertising business. Netflix’s approach to the launch of new offers supported by advertising picks up speed. One way, the latter, to maintain the customer base – and even possibly increase it – avoiding the backlash of exits due to the increase in subscription costs. For Netflix, however, this is a real strategic turning point: until now, advertisements had been a taboo for the purist and founder Reed Hastings, who had made the simplicity of the subscription Netflix’s mantra and the element of differentiation.
From Snap the top managers for advertising
And so, after the choice of Microsoft and its technology for the distribution of advertising to introduce a “low-priced and advertising-supported subscription plan”, as declared by Netflix itself in mid-July, now the Los Gatos giant makes official the arrival of the two new managers. Snap chief business officer Jeremi Gorman will join Netflix as president of global advertising in September, while Peter Naylor, Snap’s vice president of sales for the Americas, will serve as Netflix’s vice president of advertising sales.
Disney +, advertising in the USA
Two top profiles, in short, to do battle in an arena – that of on-demand services that leverage advertising – which by the end of the year will also see the entry of Disney + in the United States. With regard to the Vod (video on demand) service of the Burbank giant, to maintain the same price as today it will be necessary to give one’s ok to viewing the contents with advertising. Otherwise, from December 8, the current $ 7.99 per month will go down to $ 10.99 per month. Don’t worry (for the moment) for Italian aficionados. In Italy, the subscription price of 8.89 euros per month or 89.90 per year remains unchanged for the moment, although in all probability in 2023 the price list will be updated based on the US one.
For Netflix a strategic necessity
However, Disney entered the market aggressively. The increase is 38%, much more than what Netflix fielded (between + 8% and + 12% in Italy, depending on the profiles). For Disney, this could mean a broader subscription by subscribers to the ad-supported offer that is already a reality in the US for Hbo Max, Hulu or the smaller Peacock (Comcast). On the Netflix side, Disney’s move certainly makes it even more urgent to proceed quickly towards ad-supported offers. Moreover, the announcement at the beginning of a 2022 in which the data of the first two quarters showed a decline in net new subscribers, which amounted to almost 1.2 million for the first half of the year, was eloquent, in stark contrast to the nearly 26 million net new subscribers added in the first half of 2020, when the onset of the pandemic gave a vigorous (too much) push to video on demand services.
The battle of numbers between Disney + and Netflix
Currently, mid-year numbers, the latest available, indicate a net increase globally in Disney + flagship service subscribers of 14.4 million, bringing the total to over 152.1 million. Adding up the paying users of the Hulu platform (46.2 million) and ESPN + sports (22.8 million) the total was 221.1 million, surpassing the 220.67 reported by rival Netflix in the last quarter. A yellow, however, emerges on the methods of calculating subscribers and season tickets. Disney reports subscriptions: by offering packages of multiple services, it counts them as multiple subscriptions, one per service even if carried out by the same user. So a bundle of Disney +, Hulu and ESPN +, the three main offerings, is counted three times. Netflix, not having packages of more services, instead counts the subscribers, which in his case coincide with the subscriptions.