Netflix's Zero Ad Tolerance Policy Boosts 'Scarcity' Value Of Other Online Vid Ad Suppliers

The ad industry is going through a premium content debate it hasn't experienced since the rise of pay TV services like HBO and Showtime, but this time it isn't whether, when and how much premium TV channels might charge for advertising (they still don't), but whether, when and how much premium online content outlets like Netflix will. While Netflix still doesn't, and may never offer advertising, it's position has created greater demand -- and "scarcity" -- for other premium online video suppliers who do, especially Hulu.

"The Netflix Effect, or the scarcity of ad space alongside ultra premium online video content, has a profound impact on the economics of digital media. Primarily, it's helped prop up the CPM rates on Hulu and boosted the online video marketplace in general. Digital video ad spending is projected to grow 50% in 2012, that's up from 33% growth in 2011," reports the Huffington Post.
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