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Netflix said it plans to upgrade its ad-based offering in 2024, while Disney is moving to take full ownership of Hulu in an $8.6bn deal.
Netflix claims its ad-supported subscription tier has managed to reach 15m monthly active users one year after it was launched.
The streaming giant was against the idea of adverts on its service for years, but had a change of heart last year after it reported a loss of around 200,000 subscribers in the first quarter of 2022. This marked the first time the streaming giant had lost subscribers in more than a decade.
The plan launched in November 2022 in 12 countries, giving users a cheaper subscription option that included an average of four to five minutes of ads per hour, along with certain viewing restrictions.
Netflix claims the plan has been highly successful since then, contributing to one of the company’s highest ever quarterly jumps in subscribers earlier this year.
“Our goal isn’t just to offer the same products and tools the industry has come to expect – although we’ve made a lot of progress on that front over the last year,” Netflix said in a blogpost. “It’s to build something bigger and better than what exists today.
“We want to shape the future of advertising on Netflix and help marketers tap into the amazing fandom generated by our must-watch shows and movies.”
The company said it is upgrading this subscription plan to include higher video quality, two concurrent streams and to have downloads available “by the end of this week”. Netflix also plans to have sponsorship options available globally next year.
Disney wants all of Hulu
Meanwhile, Disney is moving to take full ownership of Hulu, by acquiring to stake owned by Comcast. The competitor to Netflix said this deal will further its streaming objectives.
Under the deal, Disney plans to pay roughly $8.6bn to Comcast’s NBC Universal. Disney said this represents NBC’s ownership of Hulu, based on the $27.5bn value agreed by the companies when they went into agreement in 2019, but minus the “anticipated outstanding capital call contributions” payable by NBC to Disney.
The deal is subject to change and Disney said the timing process is “uncertain”, but expects the deal to be completed sometime in 2024.
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