Netflix New Ad-Supported Content: Legacy TV Streamers Have A Leg Up

A new and more complex world for Netflix is coming with its planned advertising-supported option -- and legacy TV company streamers have a leg up. 

And for legacy TV network groups and their similar streaming platforms plans? Already taken care of -- and then some.

Compared to other streaming competitors, Netflix now reportedly needs to renegotiate deals with Hollywood studios, which in turn have to deal with actors, producers and directors looking for new dollars Netflix could reap from that ad-supported content.

All this might raise Netflix production costs anywhere from 15% to 20% -- depending on the specific TV show or movie, according to a report in The Wall Street Journal. What about legacy TV media companies and their streaming services?



All current premium streaming services -- Paramount+, Peacock, HBO Max, and even now, Disney+ -- had a specific plan or a preliminary one when it comes to a possible ad-supported option.

This is all backed by streamers' TV-centric owners that for decades have sold TV advertising in many platforms -- networks, TV stations (syndication), and digital platforms.

This includes the previous WarnerMedia -- owner of HBO Max-- which sells advertising time in TV shows and movies airing on its own TNT and TBS cable TV networks.

To an extent, it also helps Walt Disney, NBCUniversal, Paramount Global and Warner Bros., which have longtime business experience as intellectual property owners of TV shows and movies -- content selling on different types of platforms around the world -- ad-free and ad-supported.

Netflix needs to ramp up its advertising IQ -- something it has long discouraged. It has never operated or owned advertising-supported media platforms -- let alone broadcast or cable TV networks.

That said, even for Disney, not everything goes smoothly when it comes to renegotiating existing TV and movie production deals -- partly because of pandemic-related disruption.

A year ago, Disney’s “Black Widow” went with a simultaneous theater-streaming showing on Disney+ Premier Access for $30 pay per view, in response to theater closings due the pandemic. Star Scarlett Johansson's original contract was for a “theatrical”-only debut of the movie. In response, Disney reportedly made a quick adjustment to her contract.

While we are now seemingly out of those kinds of pandemic disruptions, we are still dealing with the growing pains of the new streaming and connected TV world -- especially as Netflix, Disney+ and others are hitting a few bumps in the road.

Look for more unexpected turns on the track in this fast-moving race.

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