Why Not A New Netflix, But Ad Supported?

What America needs is a good, cheap, advertising-supported online content provider of quality content. Maybe Hulu will be that entity and we will be finding out soon as it spins out more of its new programming. It could be a contender. 

But what a market still remains!  

If younger viewers are leaving conventional commercial television, they’ve already come to grips with the non-conventional streaming alternative kind of branding that includes sponsored content and native advertising. Or features hosts, like the young women on Style Haul, hawking brands.

Some of that is repugnant, but not brand new at all.  Ronald Reagan hosted the “General Electric Theater” from 1954 to 1962, when television was still sort of new. 

Off-camera he used his on-camera presence to gain popularity as a speaker all around America and all was well until he kept telling Rotary Clubs all over America that the Tennessee Valley Authority an example bad “big government.” GE had a $50 million

contract with the TVA, and soon Reagan was gone.

That kind of sponsorship is so old hat now that musicians and athletes openly joke with their fans about their affiliations.  Every star is sponsored by somebody. 

If the current TV advertising model isn’t going to transfer online, then maybe the old one will: An omnipresent commercial, soft enough that, like Hulu, the provider can also charge users a subscription fee, but with a new kind of commercial presentation.

By doing not-much, the commercial content business is asleep at the switch. Viewers pretty clearly will pay to avoid ads, and they’re getting more and more, and better and better, opportunities.

Now, according to Variety, Apple is considering entering the made-for-streaming business. Also, YouTube keeps devising new pay schemes so its viewers can avoid advertising,

Amazon and Netflix are each pursuing their own strategies. In a showy way, Netflix is telling audiences it wants to embed its cash in television-like programming, particularly its own.

Its loss of its alliance with the Epix cable network means some big movie titles are will be going to Hulu which snagged Epix after Netflix let it go.

In a statement, Ted Sarandos, Netflix’s chief content officer, said,  “our strategic paths are no longer aligned. Our focus has shifted to provide great movies and TV series for our members that are exclusive to Netflix. Epix’ focus is to make sure that their movies will be widely available for consumers through a variety of platforms.”  

He explained that while some of those lost titles were popular, they’re available elsewhere. Also, by the time theatrical releases get to theaters, they’re old.

And of course, I exaggerate because millions looked forward to seeing films like Epix-packaged film such as  “Hunger Games: Catching Fire” and “World War Z” for the first time, or again. Netflix believes its money is better spent on exclusive films, and more pointedly, original programming.

But it’s not like Netflix is wall-to-wall originals. “The Netflix loss of Epix is less significant when compared with the ‘Exclusive’ Disney/Pixar/Marvel catalogue that Netflix will be adding to its service shortly,” says Time Ware, vice president of television for Tremor Video, “not to mention the continuing success of Netflix' original programming investments like 'Orange is The New Black' or 'House of Cards.’ ”

He adds, in an email,  “The overarching headline here is it’s a good time to be producing and licensing popular video programming."

He could add, it’s also a great time to create a palatable version of Netflix that also makes room for advertisers. Because one way or another, they’ll want in. If not now, when?
5 comments about "Why Not A New Netflix, But Ad Supported? ".
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  1. Douglas Ferguson from College of Charleston, September 1, 2015 at 1:52 p.m.

    Why are people so desperate to save advertising? If viewers wanted ads, they wouldn't try so hard to avoid them. Ad blockers and DVR-skipping are strong evidence that advertisers are unwanted. Why "make room" for an unwelcome visitor?

  2. Ed Papazian from Media Dynamics Inc, September 1, 2015 at 3:28 p.m.

    Douglas, a lot of people have no problem with TV commercials---except in situations when too many of are crammed into a break or there are too many breaks. This is true sometimes---but not all of the time. Also, we must remember that advertising tells poeple about products or services that they might need but don't know about and it drives sales. If there were no TV ads awareness of many products and services would plummet and the impact on our economy might be rather harmful.

    That said, nobody can argue that there are situations where the number as well as the types of commercials can be annoying---in which case, the viewer is free to avoid them in many ways---as some do. But why champion a world where there are no ads at all?

  3. Albert Lin from Bigcommerce, September 1, 2015 at 4:13 p.m.

    Isn't that Crackle?

  4. Benny Radjasa from Armonix Digital, Inc., September 2, 2015 at 3:04 p.m.

    We are shifting to on demand lifestyle and work, that enables Uber, Handy, AWS, etc, the list goes on.  What type of commercials, how much commercial, frequency of the ad, all can tick a person off.  Let the consumer decide how they want to support for the content (100% ad supported, 50% ad supported, 25% ad supported, 100% subscription fee based, etc).  It not that hard to calculate these tiers, though operationally they do require lots of work to be able to make it happened.  But changing times requires evolution from all spectrum of the consumption cycle, or you risk being left out as irrelevant dinosaur.  You either let the consumer decide or they will decide for you, which is happening with online media where consumers install ad blockers. 

    Interesting article about this on Digiday today:

  5. Henry Gomez from MARCA replied, October 18, 2017 at 11:18 a.m.

    Because people hate commercials but they LOVE free stuff. Advertisers make stuff free or at least cheaper. Start-ups that are providing a lot of value to consumers right now and gaining huge market share are also bleeding cash. Eventually these types of companies have to turn a profit. I see a not too distant future where Netflix et al introduce ads as a way to keep subscription fees down.

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