Case - Platform comparisons

Netflix recently introduced a new, lower-cost subscription tier supported by ads, aiming to balance the reduced subscription fee with revenue generated from advertisements shown during programming. This move diverges from the company's traditional ad-free model, marking a significant shift in its revenue strategy. However, the effectiveness of this approach hinges on whether the nature of Netflix's service aligns with a marketplace model similar to Instacart's.

Instacart, an online grocery delivery platform, capitalizes on ads placed close to the point of purchase, making them highly lucrative due to their direct connection to consumer buying intent. Moreover, Instacart can track and leverage data on customer purchases following ad exposure, allowing advertisers to see a clear return on investment.

In contrast, Netflix's core service revolves around streaming shows and movies, which does not inherently align with a direct intent to purchase products. This fundamental difference raises questions about the viability of an ad marketplace model for Netflix.

Is Netflix's approach likely to create a similar marketplace for high-intent ads that Instacart was able to create?