Today Motherboard reported that Netflix is testing out running advertisements that run before and after a user watches a video, showing that Netflix is caving a bit to pressure to have more of a Hulu/HBO-like model. In fact, there have been predictions that Netflix would have to look into this form of advertising to be more profitable at some point.
As Netflix’s growth continues to be strong with an acute focus on acquiring and retaining users by way of creating their own content, this move seems like a huge step back, not just for Netflix, but for advertising, too.
“Internet TV is divorced of the need of advertising revenue because we can develop direct relationships with the consumer,” said Neil Hunt, Netflix’s chief product officer back in May of last year. Hunt even went on to say that marketers will have to “find a different place to advertise.”
For a company who has been eager to advertise their shows through immaculate use of native advertising, I find it curious that they are not seeing the opportunities for brands to “advertise” within their own content.
Why make over-the-top services look more like linear TV Why not innovate and push back You’re marketing to consumers who were raised on ad-skipping through TiVo and now they’re doing the same thing with YouTube adblockers. It doesn’t matter how long, short or entertaining your spot is, they are skipping it. The very reason why users are electing to opt for paid streaming services is so that they no longer have to deal with the intrusion. It’s only a matter of time before users find a way to get around those too.
Hey @netflix love you all & heard you’re testing ads. If you ever roll them out I’ll willing to pay a substantial premium to not see them.
Hey @netflix love you all & heard you're testing ads. If you ever roll them out I'll willing to pay a substantial premium to not see them.
— Lex Alexander (@TheLexTimes) June 1, 2015
That’s just a sampling of the tweets from Netflix users today, and at a glance it is largely negative, even though Netflix has not yet opened up these ads to third parties.
I’m sure there are marketers out there who are elated about this news and if Netflix does decide to include third parties, there would no doubt be a line down the block. Netflix has 60 million users who combined spend 10 billion hours watching (binging, really) on a whole lot of content each month. Who wouldn’t want to get in on that kind of viewership, that kind of data, and a viewing schedule separate from the TV grid
Netflix has no shortage of opportunities to work with marketers. What is and should continue to be their #1 priority is viewership. It arguably is a marketer’s priority, too.
So here’s what the viewership wants: they don’t want ads that look and feel like ads. We don’t mind, however, seeing Frank Underwood play Monument Valley in House of Cards, for example, or enjoying well-executed brand content.