The streaming entertainment business boomed during the pandemic but streaming giants are now adjusting strategies. Netflix recently changed its policy and will carry advertising. Most recently, its competitor Warner Brothers Discovery announced that it is changing its streaming-first model and will go more for advertising based channels and licensing of movies.
The company was formed earlier this year via a merger of Warner Media and Discovery making it one of the giants competing with streaming market leader Netflix. Warner Brother Discovery for the latest quarter reported a net loss of USD 3.4 billion.
Presenting its quarterly report, management stressed the value of the merged company´s content: ”We intend to maximize the value of that content through a broad distribution model that includes theatrical, streaming, linear cable, free-to-air, gaming, consumer products and experiences, and more, everywhere in the world.”
Netflix upset the market when it for the previous quarter reported its first loss of subscribers in a decade. The report intensified the discussion about how the streaming market will change when the worst part of the pandemic is over. Netflix blamed increased competition and that users share passwords to avoid paying the subscription.
However, the company also indicated that it would introduce advertising to be able to offer a less expensive subscription at a time when increased inflation makes households cut costs. The company had earlier had a strict no-advertising policy.
Netflix has since confirmed that it will offer two alternatives: the present advertising free subscription and a lower cost one with advertising. The company had signed an agreement with Microsoft as its advertising partner.