The Extra Costs of Netflix's Ad-Supported Tier
Netflix (NASDAQ: NFLX) is planning to launch its ad-supported tier next year, as it looks to reinvigorate subscriber growth. While the new tier could bring in millions of new subscribers and billions in ad revenue, there are some additional costs for Netflix as well.
Specifically, it still needs to secure the rights to show ads during much of its licensed content. The streaming leader could find itself at a disadvantage compared to many of its competitors that have launched with ad-supported tiers in mind.
Netflix has dozens of original series and films, but it still has a big library of licensed content. The licenses it has negotiated are for a paid streaming service only; Netflix doesn't have the rights to show ads during its licensed shows.
Source Fool.com
