Details have begun to filter out on Netflix’s plans to create an ad-supported tier of service. According to company internal documents and user surveys obtained by Business Insider, the streamer is planning on showing ads before and after a program, but not taking commercial breaks during playback. This is unlike other ad-supported services such as Hulu, which plays ads during a program. Netflix will finalize the specifics of its ad placement strategy using results from extensive surveys of its customers.
The company is also reaching out to ad execs – the other customer – to get input on the features advertisers to want from their platform. In the leaked documents, Netflix asks agencies, “How might a new offering, like the one Netflix is developing, be able to help strengthen your existing marketing plans?” and “What core things do you think is critical for Netflix to offer brands such as yourself?”
Netflix’s recent results have made it clear that the company needs to pursue new strategies to re-establish growth over the long term. However, it’s still an open question whether an ad-based tier will bring in a significant number of new value-oriented consumers without cannibalizing revenue from its current, premium-pay subscribers.