I’m searching for my pitchfork. Torch? It’s lit. Is the Internet ready to be pissed at Netflix for running pre and post-roll advertisements on its service?
The reality? Netflix is promoting its original content. What do you mean you haven’t seen Daredevil? Have you lost your mind? Here’s an ad. The promos have been placed at the beginning and the end of shows for some users.
For now, Netflix is standing by CEO Reed Hasting’s statement in 2014:
“We have no plans to go towards advertising-based models. Our brand—at least over the next couple of years and at this point—really stands for that commercial-free experience that we have, where the consumer is in control of the experience… So it’s fundamental to that control orientation that we don’t cram advertisements down people’s throats.”
Yes, he left the company room to change in a few years, but for now? What you are seeing is the equivalent of what HBO does. How many times have you seen the trailer for the second season of True Detective before Game of Thrones? Exactly.
Return the pitchfork to your closet and douse the torch. For now, it’s nothing. The company wants cross promotion for the service. Hard to fault it for that.
In the future? Well, that’s a different story. How long can a company pump out original content for $8.99 per month? Profits are ok, with the last quarter hitting $23.7 million on $1.57 billion in revenue.
Most of the revenue is tied into the global expansion plans, which should work the company further into the black when complete.
OK profits and increasing revenue has calmed Wall Street for now. Investors still love the stock, with it up 82% on the year.
Will the love last? The simple answer is no. A service costing $8.99 is not going to maintain a $37.83 billion market cap. Wall Street will want its quarterly expectations met and smashed.
Does that mean advertisements before you stream House of Cards? Which course has the least resistance? A couple of branded ads you’re forced to watch, or incrementally increasing subscription costs every couple of years?
Netflix is tipping its hand with the pre and post-roll promotions for its original content.