Netflix's New Initiative

In a big surprise to consumers (maybe not to marketers!), Netflix has announced that they are "quite open" to bringing ads to their platform. In the wake of a Q1 subscriber net loss (the first in a decade), the platform will be exploring options to crack down on password sharing in addition to exploring cheaper, ad-supported subscription tiers.

For years, Netflix has eschewed the AVOD (Ad-supported Video on Demand) model of competitors like Hulu or Tubi, intent on maintaining their SVOD (Subscription Video on Demand) product. However, as the streaming landscape becomes more crowded, the market becomes more saturated, and content offerings become more fragmented, SVOD services will likely have to resort to running ads in order to supplement dwindling subscriber bases and stagnant revenue.

Netflix’s decision to run ads represents an exciting moment for the CTV ecosystem. Each major streaming service that opens inventory to ads represents more potential audience members for digital video campaigns. While Netflix's future plans are still up in the air, media buyers can certainly expect more CTV inventory to become available over the next couple of years as streaming platforms rethink their subscription models.