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Goodbye binge-watching: Netflix, others, bringing back ad breaks in coming weeks – Global News

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Canadian Netflix users will see a new membership option starting Tuesday that costs less but comes with a catch: commercial breaks inserted into their favourite shows.

After years of uninterrupted binge-watches, the world’s largest streaming service is making way for a word from its sponsors. And as inflation continues to pinch consumers, the proposal of a cheaper Netflix plan may sound enticing to some.

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Netflix isn’t alone in believing that commercial television is back in a big way.

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More Canadians bidding goodbye to streaming subscriptions as cost of living climbs: study 

Several free ad-supported streaming services will launch in Canada over the coming weeks, all of them built on a business model that taps into the country’s multi-billion advertising industry to finance and acquire programming.

Analysts say together the platforms could reshape how we watch and pay for television. More viewers are complaining that streaming costs have soared near the level of their old cable bills, which has pressured each service to reconsider its business model.

“Consumers are faced with more choice, more platforms and are making more deliberate decisions as to which streaming services they keep and which ones to cancel,” said Justin Krieger, senior technology and media analyst at consultancy firm RSM Canada.


Click to play video: 'Disastrous week for Netflix creates concern for future of streaming'

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Disastrous week for Netflix creates concern for future of streaming


Of the newcomers, Pluto TV debuts on Dec. 1 with more than 100 channels of free TV series, movies and sports that stream “live” online on a platform that mimics the experience of channel surfing, complete with the commercials.

Around the same time, CBC will introduce a revamped free streaming news channel that will be available on CBC Gem and multiple other streaming platforms. A flagship program hosted by Andrew Chang of “The National” will be the main attraction, with advertisements interspersed throughout the day.

South of the border, Disney Plus rolls out an ad-supported option later this year with some industry observers predicting it will apply the same model in Canada soon after. The ad tier will be introduced at the price of Disney’s existing commercial-free service. Subscribers who want to eliminate the ads will have to pay a premium.

Each service has its own reasons for getting into the ad business.

Read more:

Netflix recovers from subscriber slump, projects gains from advertising option

For Netflix and Disney, one of the main drivers is growing revenues as programming costs soar and competitors lure away subscribers.

Meanwhile, the free streaming services use ad revenues to fund a slate of original and licensed programming, which puts incredible pressure on Netflix to maintain its leading position with attractive new films and shows.

Netflix’s pitch

Earlier this year, after repeatedly swearing off the possibility of ever getting into advertising, Netflix changed its tune by announcing it would launch an ad tier for subscribers in key international markets.

In Canada, the “basic with ads” plan costs $5.99 per month _ less than the plans without ads, which start at $9.99 and peak at $20.99 a month.

As a trade-off for the savings, Netflix says subscribers will be presented with an average of four to five minutes of ads per hour played before and during their TV shows and films.

Video quality on the Netflix ad plan tops out at 720p, leaving full high-definition streaming at 1080p and 4K for premium subscribers. Viewers also won’t be able to download titles on their devices and not everything in the service’s library will be available.

Those restrictions will sour the appeal to many Netflix devotees, suggested Carmi Levy, a technology analyst based in London, Ont.

He said Canadians were sold the idea of a commercial-free Netflix a decade ago which led other entrants in the market to mimic their approach with similar models.

That’s different than the United States where Peacock, Paramount Plus and HBO Max all offer less expensive ad tiers as a subscription option, while Crackle and Amazon’s Freevee are among the major players in free, ad-supported platforms.

“Canadians don’t have that legacy of experience and as a result may be more resistant to the way Netflix is introducing that service,” he said.

“It’ll take time for Netflix and others to educate Canadians on the advantages of paying less for a streaming service and getting ads served up in return.”

Do Canadians want ads?

Kaan Yigit, a technology analyst at Solutions Research Group, said a survey conducted by his firm earlier this year found U.S. viewers have already adopted ad-supported subscription options.

About 40 per cent of HBO Max subscribers signed up for its lower-priced ad tier, he said, while an average of 58 per cent of subscribers used the cheaper versions of Paramount Plus and Peacock.

He estimates a modest 20 per cent of Canadian Netflix subscribers will join the ad tier over the next 12 to 18 months.

However, Netflix’s initial sign-up numbers won’t be the best indicator of long-term success for the ad model, suggested Levy.

Subscribers who joined for a deal could be turned off if the ad breaks become as long as they are on network TV stations, which typically air 20 minutes of commercials per hour.

“The devil is always in the details whenever a streaming provider introduces an ad-based tier,” Levy said.

“What matters most is how intrusive that presentation of ads is to the overall viewing experience. And if it is intrusive in the way that consumers have long complained about traditional broadcast television ads, then this could very well be a non-starter for Netflix.”

The ad agencies

Until those intricacies play out, advertising agencies say their clients are salivating over the prospects of new placement options in the Canadian market.

“What we’re seeing is a lot of initial excitement and questions around Netflix, in particular,” said Marissa Cristiano, an account director at Cossette who says she’s “exploring” ad buys on the service with some clients.

“They’ve done a really good job of creating … the type of content that brands really do want to ally with.”

Cherie Hill, senior vice president of media at marketing firm Society, Etc., said she anticipates Netflix ads will be angled toward “budget-conscious” shoppers, with a strong focus on consumer staples, household items and car companies.

She doesn’t anticipate much blowback from viewers, mainly because Netflix is making it an opt-in proposition.

“If you’re choosing to have the commercials, it’s not going to leave a negative experience,” she said.

“They’re providing an option and they’re managing expectations.”

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Dow Jones Rises But S&P, Nasdaq Fall; Nvidia, SMCI Flash Sell Signals As Bitcoin's Fourth Halving Arrives – Investor's Business Daily

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[unable to retrieve full-text content]

  1. Dow Jones Rises But S&P, Nasdaq Fall; Nvidia, SMCI Flash Sell Signals As Bitcoin’s Fourth Halving Arrives  Investor’s Business Daily
  2. Iran fires at apparent Israeli attack drones: Mideast tensions  The Associated Press
  3. S&P 500 extends losing streak to sixth day, Dow up 210 points  Yahoo Canada Finance
  4. Stock Market Today: Dow, S&P Live Updates for April 19  Bloomberg
  5. Stock market today: Wall Street limps toward its longest weekly losing streak since September  CityNews Kitchener

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Netflix stock sinks on disappointing revenue forecast, move to scrap membership metrics – Yahoo Canada Finance

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Netflix (NFLX) stock slid as much as 9.6% Friday after the company gave a second quarter revenue forecast that missed estimates and announced it would stop reporting quarterly subscriber metrics closely watched by Wall Street.

On Thursday, Netflix guided to second quarter revenue of $9.49 billion, a miss compared to consensus estimates of $9.51 billion.

The company said it will stop reporting quarterly membership numbers starting next year, along with average revenue per member, or ARM.

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“As we’ve evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact,” the company said.

Netflix reported first quarter earnings that beat across the board on Thursday, with another 9 million-plus subscribers added in the quarter.

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Subscriber additions of 9.3 million beat expectations of 4.8 million and followed the 13 million net additions the streamer added in the fourth quarter. The company added 1.7 million paying users in Q1 2023.

Revenue beat Bloomberg consensus estimates of $9.27 billion to hit $9.37 billion in the quarter, an increase of 14.8% compared to the same period last year as the streamer leaned on revenue initiatives like its crackdown on password-sharing and ad-supported tier, in addition to the recent price hikes on certain subscription plans.

Netflix’s stock has been on a tear in recent months, with shares currently trading near the high end of its 52-week range. Wall Street analysts had warned that high expectations heading into the print could serve as an inherent risk to the stock price.

Earnings per share (EPS) beat estimates in the quarter, with the company reporting EPS of $5.28, well above consensus expectations of $4.52 and nearly double the $2.88 EPS figure it reported in the year-ago period. Netflix guided to second quarter EPS of $4.68, ahead of consensus calls for $4.54.

Profitability metrics also came in strong, with operating margins sitting at 28.1% for the first quarter compared to 21% in the same period last year.

The company previously guided to full-year 2024 operating margins of 24% after the metric grew to 21% from 18% in 2023. Netflix expects margins to tick down slightly in Q2 to 26.6%.

Free cash flow came in at $2.14 billion in the quarter, above consensus calls of $1.9 billion.

Meanwhile, ARM ticked up 1% year over year — matching the fourth quarter results. Wall Street analysts expect ARM to pick up later this year as both the ad-tier impact and price hike effects take hold.

On the ads front, ad-tier memberships increased 65% quarter over quarter after rising nearly 70% sequentially in Q3 2023 and Q4 2023. The ads plan now accounts for over 40% of all Netflix sign-ups in the markets it’s offered in.

FILE PHOTO: Netflix reported first quarter earnings after the bell on Thursday. REUTERS/Dado Ruvic/File PhotoFILE PHOTO: Netflix reported first quarter earnings after the bell on Thursday. REUTERS/Dado Ruvic/File Photo

Netflix reported first quarter earnings after the bell on Thursday. REUTERS/Dado Ruvic/File Photo (REUTERS / Reuters)

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

For the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click here

Read the latest financial and business news from Yahoo Finance

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Oil Prices Erase Gains as Iran Downplays Reports of Israeli Missile Attack – OilPrice.com

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Oil Prices Erase Gains as Iran Downplays Reports of Israeli Missile Attack | OilPrice.com



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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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  • Oil prices initially spiked on Friday due to unconfirmed reports of an Israeli missile strike on Iran.
  • Prices briefly reached above $90 per barrel before falling back as Iran denied the attack.
  • Iranian media reported activating their air defense systems, not an Israeli strike.

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Oil prices gave up nearly all of early Friday’s gains after an Iranian official told Reuters that there hadn’t been a missile attack against Iran.

Oil surged by as much as $3 per barrel in Asian trade early on Friday after a U.S. official told ABC News today that Israel launched missile strikes against Iran in the early morning hours today. After briefly spiking to above $90 per barrel early on Friday in Asian trade, Brent fell back to $87.10 per barrel in the morning in Europe.

The news was later confirmed by Iranian media, which said the country’s air defense system took down three drones over the city of Isfahan, according to Al Jazeera. Flights to three cities including Tehran and Isfahan were suspended, Iranian media also reported.

Israel’s retaliation for Iran’s missile strikes last week was seen by most as a guarantee of escalation of the Middle East conflict since Iran had warned Tel Aviv that if it retaliates, so will Tehran in its turn and that retaliation would be on a greater scale than the missile strikes from last week. These developments were naturally seen as strongly bullish for oil prices.

However, hours after unconfirmed reports of an Israeli attack first emerged, Reuters quoted an Iranian official as saying that there was no missile strike carried out against Iran. The explosions that were heard in the large Iranian city of Isfahan were the result of the activation of the air defense systems of Iran, the official told Reuters.

Overall, Iran appears to downplay the event, with most official comments and news reports not mentioning Israel, Reuters notes.

The International Atomic Energy Agency (IAEA) said that “there is no damage to Iran’s nuclear sites,” confirming Iranian reports on the matter.

The Isfahan province is home to Iran’s nuclear site for uranium enrichment.

“Brent briefly soared back above $90 before reversing lower after Iranian media downplayed a retaliatory strike by Israel,” Saxo Bank said in a Friday note.

The $5 a barrel trading range in oil prices over the past week has been driven by traders attempting to “quantify the level of risk premium needed to reflect heightened tensions but with no impact on supply,” the bank said, adding “Expect prices to bid ahead of the weekend.”

At the time of writing Brent was trading at $87.34 and WTI at $83.14.

By Tsvetana Paraskova for Oilprice.com

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