NETFLIX & THE FUTURE OF AD-FREE TV
In the five years that I have lived in Toronto, I did not own a TV. Buying a TV used to be a huge financial and personal commitment. You couldn’t just buy a TV ($500), you had to get cable ($50/month), a Blu Ray player ($80) and then buy some Blu Rays and DVDs to play on it ($25/BR or DVD). And to make it all worth it, you had to have the time to watch it.
Then Netflix came to Canada and changed my life. I now have a TV ($500) and a little black box called the Apple TV ($99) and together, they allow me to watch unlimited movies and TV shows for a small monthly fee ($8) with a flexible schedule and no commercial breaks. Like me, 36,300,000 others over the world have discovered the inexpensive, commercial-free joys of Netflix.
Netflix has not only changed my life, but is slowly changing the future of entertainment media and along with it, traditional advertising. Back in the day, television networks were needed because they had the hardware to actually bring television programming into our homes. Today, cable TV and Internet streaming services have rendered television networks practically useless (besides, you know – advertising and production), but our entertainment model is still revolving around them.
Netflix has now begun producing original content. The streaming service now has 10 original shows in the works or currently streaming (Like ARRESTED DEVELOPMENT!) – and they say this is just the beginning. Netflix believes that Internet TV is the future of media consumption and will eventually phase out traditional network television. Advertising is and always has been a big part of network television. Fees charged for advertising spots used to and still do, pay for the production of shows, which meant that advertising has always defined the demographics and the genre of television shows on a particular network. Where is advertising’s place in this futuristic world without network television?
Potential outcomes include:
- Netflix allows advertising – but only highly targeted and relevant advertising based exclusively on their data.
- Netflix sells data to advertisers. There may not be advertising, but the data is still useful for Market Research.
- Network television does not phase out because Netflix makes a huge mistake and ruins everything they’ve been building and we’re back in the television advertising game, so we have nothing to worry about.
- Netflix allows advertisers to sponsor programming and shows will be named in the following format: “Ben & Jerry’s presents: Arrested Development”.
- Product placement becomes the new content marketing and you see brands so much, that all movies look like the Transformers series.
Do you think network television will be phased out eventually? Where do you see advertising in a future like this?