Would Netflix try to pursue advertising revenue?

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Hulu has an ad and an ad-free version of its streaming service, what’s to stop Netflix from doing the same?

Paul O'Brien Changed status to publish February 21, 2022

In the current market, total ad spend is pretty flat (actually declining a bit), so it is a fight to steal those ad dollars from somewhere else (i.e. spend some on Netflix, instead of running prime-time ads on broadcast NBC). OTT ad spend is still a tough sell for most marketers, and streaming services have struggled to fill their ad inventory. Folks like Paramount, Peacock, etc… have a bit of advantage, as they go to existing advertisers on their broadcast side, and give them some deals to bundle in some OTT add spend.

And those orgs that are bought into ‘internet ad spending’ typically prefer to spend those dollars on FB, Google, Amazon, etc… where the ROI is more proven (at this point).

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@meganbotha This is a tangent to the question, but I feel it is better to post here than to the general news feed.   I received this story in my news feed because I am a Taylor Sheridan fan.

My take on this story is how capital intensive to launch a streaming service around scripted content.   Paramount+ is betting on one guy with the goal to reach the number of subscribers equivalent to the #3 service in the USA, HBO Max.   It feels soooo old media and seems likely to fail.   The primary reason is a streaming service needs to be global and have the personalization technology backend to serve its subscribers.

I started in online video in 1994 with the vision that you can watch any show, at any time, from any region.   It took a quarter of a century for that to materialize, but it is here today.   Audiences are global and only Netflix and YouTube are in the position to capitalize on it.

I admire Paramount+ risk-taking, and I wish them good luck.   However, if they were Squid Game contestants, I don’t think they have the survival skills.
https://www.latimes.com/entertainment-arts/business/story/2021-11-03/can-viacomcbs-yellowstone-universe-spur-paramount

Paul O'Brien Posted new comment November 5, 2021
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They already have tried. They’ve tested reactions to it by adding promos of other shows, videos in the main screen of their app, and with short reels when you move your cursor around the videos available.

Those were tests to see how people would react to advertising; granted, advertising their own content, but the result is more or less the same (besides, if people hate seeing ads for other shows on the same service, you can appreciate how that tells the company that other ads are probably more reviled)

It goes without saying that they’ll keep trying. As a company, they have a responsibility to maximize revenue and in media, major brand advertising is a cash cow.

That said, hopefully they’ve all (Amazon, Disney, Hulu, Paramount, etc.) learned enough from the Cable era and Hulu’s more aggressive push into advertising, that people are now aware that they can easily switch, or even get shows for free if the really want. Thanks to streaming, Advertising on “TV” shows has a greater cost to the “channels” — they’ll lose subscribers and viewers if they delve too far into advertising.

So will Netflix try? Yes, of course. Will it succeed? I doubt it. Technology in media is in this incessant grind to prevent people from having to sit through ads.

Paul O'Brien Answered question November 2, 2021
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