Ads are coming to Netflix – or rather to a new, as-yet unnamed Netflix tier – and the news has sent some people spiraling. It shouldn't, though, because a commercial-supported Netflix is the only way to save the streaming service, keep your favorite shows on the air, and ensure that there are more Stranger Things-level binge-worthy series in the future.
Almost as soon as Netflix Co-CEO Ted Sarandos uttered the words "We're adding an ad tier," at the Cannes Lions entertainment industry event, panic ensued.
Even though Sarandos made it clear that ads are not coming to Premium Netflix (the $19.99/£15.99-a-month tier), I'm not sure people got the message. They responded on Twitter with denial (opens in new tab), and concerns that Netflix is just becoming a "global TV channel (opens in new tab)."
Others lamented that perhaps Netflix should work on not abruptly canceling shows (opens in new tab) before introducing ads.
I get the concerns, but they're also missing the point.
You want this
Pulling in new customers with a low-cost tier while generating what could be billions in ad revenue is, ultimately, a win for every Netflix subscriber.
If you're frustrated that Netflix is refusing to give your beloved series (opens in new tab) more than one season to find an audience, the Netflix ad tier could solve that problem.
If you're wondering why you've run out of things to watch on Netflix, Ad-Netflix could solve that problem.
If you're sick of all the reality programming on Netflix, and wondering why Netflix doesn't produce more shows like Stranger Things, AdFlix could solve that problem, too.
Now, I don't know if Netflix will go with 'AdFlix' for its low-cost tier. However, if it does adopt this admittedly awful name, I would like credit (and maybe a small honorarium).
There is a path
I've seen how ad-supported platforms work. I'm currently on the Paramount Plus ad plan. If I want to watch one of its constantly emerging Star Trek franchise series, I have to sit through between four and eight ads (usually four commercial breaks) per one-hour series. It's not terrible. I usually pick up my phone and ignore the ads.
I suspect Netflix's ad-supported tier might have fewer ad breaks. In fact, I wonder how well its current shows are designed to support commercial breaks.
Whether or not you switch to the ad tier to save money (it could give you as much as $14/£10 off a month), there will be a net benefit for all Netflix subscribers.
The money generated from ad revenue will support what has ballooned to at least a $230 billion-a-year content budget. In keeping with what has been a parade of unpopular cost-cutting moves, Netflix might be spending less on original shows this year, but it's still likely in the range of the budget for a small European country.
As soon as Netflix unveils Adflix (TM), its subscription numbers will balloon again. While it will need more scale (more subscribers) to achieve similar revenue numbers to what it might have had with full-boat subscribers, I think the streamer's cashflow problems will quickly end.
What will follow is a Netflix Spring, with tons of new content initiatives, maybe an Intellectual Property acquisition or two (surely, it will buy Roku and the Quibi library by then) and the end of unexpected show cancellations.
I'm not saying your favorite show will live on no matter the streaming numbers, but Netflix will have the wherewithal to give things a chance.
Trust me: Adflix... I mean, a Netflix Ad tier, is a very good thing.