Why is Netflix adding commercials? Here's why you've been getting ads

Wondering why you've been seeing Netflix commercials lately?

Netflix commercials
(Image credit: Getty)

Netflix users could soon see adverts when they're streaming their favourite shows, but why exactly is Netflix adding commercials?

Whether you're a fan of shows like Keep Sweet: Pray and Obey (opens in new tab) and Web of Make Belief (opens in new tab), or period dramas like Bridgerton (opens in new tab), you may have noticed ads popping up while you've been streaming on Netflix lately. 

Aside from the Netflix price increases (opens in new tab), the American subscription streaming service is looking at introducing something that is expected to get on people's nerves when it includes adverts across some of its packages. 

Why is Netflix adding commercials?

Netflix is looking to add commercials across all of its streaming packages in a bid to boost its earnings. Netflix CEO, Reed Hastings announced the ads could come into effect in the "next year or two" and he suggested it would allow for a "lower price" - despite having hiked up the cost of the service for users in recent years.

Netflix has been losing subscribers as many people look to save money on Netflix (opens in new tab) and other subscriptions following the cost of living (opens in new tab) crisis.

A recent earnings report revealed that it lost 200,000 subscribers in the first three months of 2022—and is expected to shed an additional 2 million across the globe by June.

And the streaming service already announced plans to curb the number of users password sharing (opens in new tab).

So it's likely that with these upcoming changes, users will either opt for the lower package that will contain ads or many more could cancel their subscriptions altogether.

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Why am I getting ads while watching Netflix?

Subscribers might start and wonder why am I getting ads while watching Netflix? It's because the streaming platform has now decided that advertising is an "exciting opportunity" to grow.

Previously users were allowed to watch videos instantly and without any commercial breaks - unlike mainstream TV channels or other streaming services.

But this change in stance and format could be set to annoy some users.

Mr Hastings said, “Those who have followed Netflix know that I have been against the complexity of advertising, and a big fan of the simplicity of subscription.

“But as much as I am a fan of that, I am a bigger fan of consumer choice. And allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want, makes a lot of sense.”

The Late Show with Stephen Colbert poked fun at the possible ad introduction and you can watch a clip of it below...

It's understood that customers could pay less for their subscription package is they choose to have the adverts, similar to initiatives already implemented by Hulu, Disney and HBO - who all offer cheaper ad-funded tiers.

Mr Hastings stressed that Netflix would NOT be using data tracking.

He added, "In terms of the profit potential, definitely the online ad market has advanced, and now you don’t have to incorporate all the information about people that you used to. We can stay out of that, and really be focused on our members, creating that great experience.”

When is Netflix introducing ads?

Netflix could be set to introduce ads as part of ad-supported, lower-priced subscription tiers as early as by the end of 2022, after The New York Times (opens in new tab) reported that company executives told employees in a recent note that they maybe available in the last three months of 2022.