Netflix will not put ads in children’s programs, new movies

Walt Disney Co., Netflix’s biggest competitor in paid video streaming, is also working on an ad-supported version of its flagship service, Disney+. Hulu, majority-owned by Disney, already has a version with ads.

Both Disney and Netflix plan to run fewer online ads than viewers see on live TV or most streaming services. They also hope to charge higher prices than the industry standard. Disney is more dependent on children’s programming than Netflix.

Children’s programming presents a particular advertising challenge. Google and YouTube had to pay $170 million for violating children’s privacy laws. Netflix will show children’s programs in its news service without the ads and may at some point decide to introduce ads.

Movies present a different challenge. Most filmmakers don’t want to make a movie that starts with commercials interrupting the story. Movie theaters air spots before new movies, but not during them.

Netflix can still make a lot of money without showing ads in the majority of its programming, according to industry experts. The company has a large pool of potential viewers and is known for having high quality programs, such as “Stranger Things”, “Bridgerton” and “Squid Game”. HBO Max does not run any commercials during HBO programs, including series such as “Game of Thrones” and “The Sopranos” which were originally released without commercial breaks. Netflix may go back and insert commercial breaks into some of its original series that have already appeared without such interruptions.

Microsoft Corp. will handle technology and sales for advertising on Netflix, at least initially. If it becomes a big enough business, Netflix will likely create its own ad sales operation. The company is already looking to hire salespeople and an executive to run its ad-supported service.