Netflix Rejects Advertising, Maintains Subscriptions

Netflix’s subscription business model looks to continue as it has --- with no traditional TV advertising.

Reed Hastings, chief executive officer of Netflix, said in a Facebook post on Monday: “No advertising coming onto Netflix. Period. Just adding relevant cool trailers for other Netflix content you are likely to love.”

Recently, Netflix, the subscription video-on-demand TV and movie service, has been running what looks like commercials before some TV and movie content. But those entertainment messages are just TV and movie promos for other content on the service.

Business analysts and media agency executives have wondered for some time whether Netflix would ever take on some sort of advertising model -- limited or otherwise -- in pursuing growth.

One senior media agency executive recently asked the question in an interview with MediaPost’s TV Watch: “When will Netflix start taking TV advertising?”

Many Wall Street analysts are concerned about growing costs. Netflix will spend $5 billion in programming next year -- more than HBO, Showtime, Amazon, and Starz spent on programming in 2014, combined.

But other business observers say rising global subscribers could handle much of this. One analyst estimates Netflix could grow by triple in five years to a massive 180 million worldwide customers.

1 comment about "Netflix Rejects Advertising, Maintains Subscriptions".
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  1. Will Clayton from Wiland, Inc., June 8, 2015 at 1:01 p.m.

    It is interesting to see this right now.  This weekend I experienced something I hadn't before: The recommended content section at the top of the iPad app was replaced by a full-motion video trailer -- with sound activated by default -- for Orange is the New Black.

    Regardless of whether my viewing habits make me a good candidate for the promoted show (they don't!), it's always been good practice to mute video ad sound by default; if I'm not engaged enough to un-mute it I was never a good prospect.  I'd rather see good behavior in Netflix video ads, even if they call them "promos".  They're ads, and they're behaving badly in a paid content system.

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