Tuesday, 20 May 2014

If the future is ad-free Netflix, what's the future for Ads?

Very interesting view reported by Mashable from Neil Hunt Chief Product Officer (what?) at Netflix on the future of TV at the NYC Internet Conference.

What he's saying firstly is that they will be a huge proliferation of channels (48 million he thinks) so viewers will have choice. He's right, because Internet TV is global rather than currently, national. So if you produce a channel say, on knitting, there's enough global viewers interested in knitting to make it sustainable.

Secondly, with that, comes creative freedom to produce shows like that without depending on the TV moguls. So smaller shows but with devoted audiences. Indeed "smaller" only in the global sense. Episodes might also not be the standard half or hour long either. 

Thirdly and I think most importantly, he outlined that with the massive growth in connected or Internet TV's (after all, will you be buying a TV next? probably not) that potential audiences will grow to sites like Netflix. And they will be, subscription based.

Consequently, not an advertising funded model and Netflix, as a market leader, have no plans to seek advertising because they believe, it interferes with the viewing experience. 

Indeed we know too from Apps, that consumers are prepared to pay premiums for 'ad free' Apps.

Now if that's the case and Netflix grows as it is, advertisers are going to have a problem with placing their TV Commercials. There will be less media and already, in Irish homes, Netflix have 200,000 subscribers. That 200,000 homes without access to TV advertising when they're on Netflix.