A panel of advertising and media industry executives at IAB’s Digital Content NewFronts conference in New York have speculated that Netflix will eventually carry advertising support.
One panellist, reported by CNBC, said that Netflix was actively recruiting staff to help grow advertising support. Another suggested that Netflix was looking at targeted/addressable advertising.
Netflix has consistently said it would not run traditional on-screen commercials.
Tara Walpert Levy, YouTube/Google’s VP/Agency & Media Solutions, told delegates that Netflix would need revenue growth, and implied that carrying ads was inevitable if a low-cost service was to be maintained.
JP Morgan Chase’s CMO Kristin Lemkau said viewers would be open to some advertising provided the options were transparent and that the value exchange was clear.
Joshua Lowcock, US Chief Digital/Innovation Officer at Interpublic’s media agency UM, said that while some OTT services had excluded advertising there was likely to be a swing back towards an ad-supported service. “Netflix is ad-free now. I can’t imagine a world where Netflix will be ad-free forever. If you look at their content costs. That’s where addressable advertising and new ad formats will come in.”
Some Netflix rivals, notably Hulu, already offer consumers the choice of either ‘with ads’ or without, with a near-50 per cent commensurate saving for the ad-supported service.