In reality, the Netflix offering hardly seems to have anything going for it at all. The package with ads will cost £4.99 compared to £6.99 for the cheapest ad-free package. It is a saving of less than £2 a month, not exactly a significant sum.
Even worse, licensing restrictions mean that not all the same programmes will be available to the ad-tier subscribers. For the people buying the adverts it is hardly any more appealing. According to industry reports, slots will be more expensive for advertisers than on rival streaming services such as ITV Hub, even though the agencies have no idea what they are worth, or whether people will pay any attention to them, or even how many people will sign up.
The Disney plan looks just as much of a mess, although it has at least upped the price of its ad-free package to create a slightly wider price differential between the two products. But even that is fraught with risk. Many subscribers might decide they can live without another Star Wars spin-off and cancel completely.
One point is obvious. Clearly neither company really believes in this model. So they have come up with a completely half-hearted offer that will please no one.
If they genuinely wanted to do something bold they could have taken a far more radical approach. Either Netflix or Disney could have launched a completely free ad-supported tier. That would have locked up everyone who has a broadband connection and TV set for either company.
And either of them could have launched an ambitious ad platform that undercut traditional broadcasters, offering brands access to far bigger audiences at far lower costs, and using their deep pockets to drive rivals out of the industry.
And they could have offered micro-targeted television advertising to rival the kind of niche opportunities to small companies that make Facebook such a powerful platform. Instead they went for something that when you added it up was neither one thing or the other. It is completely meh.
It is not as if they don’t need something. Netflix’s shares are down by more than 50pc so far this year, and it looks more and more like a tempting target for one of the tech giants – step forward Apple – with every month that passes.
Disney is down by 35pc since January. Investors have worked out that vast programming budgets are needed to sustain the service, and while that was fine when subscriptions numbers were climbing, once they stall the numbers don’t look nearly so good.
They needed something to persuade the next hundred million people to sign up. The trouble is, the ad-tiers are not the answer. It may not be quite up there with Cowboy BeBop, a Netflix show that was promptly cancelled within the first minute of anyone actually watching it. Even so, this is starting to look like the corporate flop of the decade – and one that will do a lot of damage to the reputation of both companies.
