If Netflix decides to run ads, revenue could actually start running | Media

NOTEtflix's decision to raise prices for UK customers by up to 20%, following a similar move in the United States, is the latest sign of the growing financial pressure to which the streaming giant is confronted to keep his balance sheet in shape for the arrival of the highly anticipated service of his rival, Disney, is expected later this year.

Society's frantic quest for global streaming dominance means that growth comes before profits, and the cost of building 150 million subscribers – including 10 million in the UK – is growing. Netflix's annual program budget is $ 15 billion (12 billion pounds sterling) and the company has ambaded a total of $ 42 billion in debt and longer-term content-related payments.

The arrival of Disney + streaming, later in the year, will put additional pressure. In the United States, Netflix will cost half the price, backed by extremely compelling content, including Marvel's superhero movies, the Star wars saga, Pixar creations ranging from Toy Story at The Incredibles, as good as The simpsons and hit Disney movies such as frozen.

Disney already pulls its content from Netflix and the price charged by those who are always willing to grant a content license is rising sharply. WarnerMedia friends The most popular issue of Netflix and she had to triple her payment, which rose to $ 100 million, to be able to keep one more year.

Netflix's price increase strategy – the latest increases in the United States and the United Kingdom from 2017 – has so far had no impact on customer loyalty and the growth rate of new subscribers . However, as the next stage of Netflix's growth should come from large markets, such as India, where average incomes are lower, its price will have to be very low to be competitive.

Given the global scale of Netflix, the company could consider the cautious introduction of advertising in certain markets. The founder, Reed Hastings, has always been against the idea, but last year, Netflix tested the commercials, or rather the movie and program trailers, in the countdown of the gaps between episodes, then that viewers watched excessively. Sir Martin Sorrell, the former head of the world's largest marketing group, WPP, said Netflix should consider advertising "as another source of revenue."

With its growing popularity, Netflix will become the UK's third-most-watched television channel this year, behind only BBC1 and ITV, making it an extremely attractive proposition for advertisers.

Any advertising strategy needs to be carefully managed because a complete disruption of television advertising could result in the exodus of customers. Analysts of Ampere believe that, if the introduction of advertisements resulted in the departure of 5% more customers, the strategy would be more profitable.

However, the introduction of advertising worked well. American streaming service Hulu, which broadcasts programs such as The servant's tale and is now controlled by Disney, said nearly three quarters of its 28 million customers benefit from a $ 5.99 plan per month that includes exposure to advertising. Ampere thinks that Hulu is making more money per subscriber with this subscription-plus-listings combination than with its $ 11.99 ad-free option.

Although surveys conducted with Netflix customers suggest that they are opposed to advertisements, Hulu's experience seems to indicate that the stated intentions do not correspond to actual actions. In the first quarter of this year, Hulu added twice as many subscribers as Netflix in the United States.

Netflix is ​​not yet at a stage where advertising revenues are critical to its viability and, with a market valuation of $ 150 billion, the largest streaming service in the world seems to retain the confidence of its investors. But having changed the traditional model of television viewing, it may be the same for the television advertising market.

What businesses fear the most is a collapse of conservatives

Business leaders are worried about the fate of the conservative party. It was clear last week when IWC President Carolyn Fairbairn urged Conservative members to vote for candidates who exclude a Brexit without agreement.

Fairbairn did not say that directly. She was careful to point out that business lobbyists, including her own, never comment on party politics and especially on the internal workings of an individual party.

But his comments did not just repeat the business mantra that leaving the EU without agreement would jeopardize jobs, profits and growth. It also seemed to be an expression of the deep-seated fear of the US leaders that an unceremonious Brexit would spoil the Conservative party's electoral prospects and usher in a Labor government led by Jeremy Corbyn.

Businesses are increasingly concerned that conservatives at the grbadroots have developed an imprudent trend. A poll placing Liberal Democrats at 24%, Labor Party and Conservatives tied at 19%, confirms the Conservative fiasco over the European elections, when the low tax and pro-business regulation party arrived in fifth place with 9.1% of the vote, could be repeated.

Without the Conservatives at the helm, businesses would be faced with the prospect of a higher minimum wage, tighter environmental controls and improved workers' rights. Measures would be taken to nationalize public services and the railways, while taxes on the richest would increase.

For some Labor leaders, encouraging the Conservatives to turn to an uncompromising Brexit indirectly offers the chance of the ultimate price: a Labor government.

But it would be a disastrous price to pay. The job must win on its own terms. Corbyn should put an end to this game without stakes and big stakes and support a second referendum. It is only then that the parties will really be able to oppose their policies to the choices of the electorate.

Even if the Blues are in Baku, aviation must go green

Those who use it rarely feel the real cost of air travel: if the gasoline of motorists is taxed, jet fuel has escaped there because of the complexity of law enforcement at the international level.

But regardless of the environmental folly of organizing two European football finals against English teams in Spain and Azerbaijan, supporters who paid thousands of dollars to take the plane were at least desperate to travel. Most often, the lowest fares drive consumers on trips they might not have considered: according to Ryanair, its average price is only £ 33, which is even lower than in 2004.

At the same time, the extreme inequality of wealth has created a booming market of even more expensive private carbon jets, whose growing ranks have contributed to making last week the busiest of flights in and out of the world. British airspace.

One can see the alarm on climate change among non-travelers engaged, and Extinction Rebellion plans to close Heathrow with drones later this month. Still, the sentiment remains relatively niche: remarkably, a study on social attitudes that the government has just published shows that a growing proportion of British adults believe that theft should be unlimited, whatever the environment.

Nevertheless, as 1,000 executives meet this weekend at the annual meeting of the International Air Transport Association in Seoul, sustainable development is becoming an increasingly important priority. The airlines have agreed, in principle, with the Corsia clearing system, a financial incentive to curb overall emissions growth. It's a plan that can divert aviation from the point of view of commitments to combat climate change, but neither do jet engines, nor the tobacco companies that fund research, stop. on cancer clean the lungs of smokers.

Compensation can not be the only solution – and in the future, the sector may be more accountable. The more far-sighted are pursuing plans for electric aircraft or cleaner fuels, although many of them do not seem viable at present. Aviation must, in one way or another, put its actions in order.