Netflix tests ads for its own shows in between episodes
Netflix is constantly testing ways to get its original content in front of viewers, but now, it is experimenting with something new: advertising. On its own platform, that is. Previously, when an episode of your favourite series ended on Netflix, the service would instantly stream another one. Now, it’s testing in-between ad breaks for its own shows, using the same recommendation system that has proved so effective on other parts of its platform.
Netflix’s share price has risen by 63% so far this year
SOURCE: Yahoo Finance
There are a few important points about Netflix’s new ads: first, they’re skip-able. The company is extremely nervous about doing anything that might lessen the addictive effect its platform has on viewers. And second, for the same reason, it will never allow external advertising on its site.
According to the company’s CEO, Reed Hastings, he would rather Netflix was just so good at recommending things you want to watch, that advertising was an unnecessary revenue generator. He said: "Our sort of Holy Grail dream is that the service was so good at promoting the new content in such relevant ways that we wouldn't have to spend externally.” The closest you can get to a traditional advert on Netflix is product placement.
Responding to a request for comment, a Netflix spokesperson gave the following explanation for the move:
"A couple of years ago, we introduced video previews to the TV experience, because we saw that it significantly cut the time members spend browsing and helped them find something they would enjoy watching even faster. Since then, we have been experimenting even more with video based on personalized recommendations for shows and movies on the service or coming shortly, and continue to learn from our members.”
“In this particular case, we are testing whether surfacing recommendations between episodes helps members discover stories they will enjoy faster. It is important to note that a member is able to skip a video preview at anytime if they are not interested."
Dominion holds Netflix in its Global Trends Ecommerce Fund.
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