Netflix, one of the largest video streaming platforms in operation, has announced that it will ban any crypto-related content and advertorial placements on its new, ad-supported subscription tier.
The platform previously announced in July that it was then about to launch this specific subscription tier, aiming at the time to attract a wider range of audiences through a cheaper introductory price. While projected evenue details regarding this new subscription tier have not yet been disclosed given its launch date slated November this year, it appears that Netflix is about to lose some traction and support because of its most recent pronouncements against crypto-related ads on its platform.
Ahead of the new subscription tier's launch, Netflix has let loose this decisive action. However, it's not just crypto that Netflix is aiming at, the ban also relates to ads that contain contentious subject matter such as politics and gambling. This ban also extends to advertisements aimed at selling products to children. Some restrictions on pharmaceutical products will also be placed, according to sources familiar with the matter.
The move can be seen as Netflix playing its part to avoid the whole problem of crypto ads running loose on its platform, not too far off from what we've seen on the Super Bowl advertising battle that went on between top crypto exchanges such as COINBASE and FTX. The amount of advertising and marketing spends that these firms pour could significantly boost Netflix's revenues, especially given the declining number of its subscribers globally. In Q2 2022, Netflix lost roughly 970k subscribers, adding to the initial loss of 200k subscribers in Q1 2022. The firm even went on to announce that it will be implementing certain cost-cutting measures in order to maintain its margins at a profitable 20% level.
The compounded question here would be whether such an exposure or relationship to crypto would be detrimental or beneficial to Netflix in the long run.
As regulatory oversight and mass adoption balance out their influence over the global crypto market, platforms such as Netflix could do well to avoid crypto altogether, if only for the reason that crypto advertisements are often done in a contentious manner that may raise eyebrows from certain regulators. In the U.K., for example, the Financial Conduct Authority (FCA), alongside H.M. Treasury have raised several warnings on crypto ads, while at the same time proposing a new set of legislative frameworks for regulating advertorial content related to or promoting crypto. Similarly, crypto ads were also banned in the French Grand Prix, with the competition's organizers citing concerns over crypto's stature under France's advertising laws.
With these global concerns and issues in mind, Netflix's new ad-supported subscription tier may do well to distance itself from crypto ads for the time being. However, as the space matures and more regulatory clarity is provided, it may not be too long before we see Netflix relent on its decision. For now, though, it's a no-crypto zone for Netflix ads.
