“No advertising coming onto Netflix. Period.” So retorted Reed Hastings, CEO and co-founder of Netflix this week, after the streaming site began showing trailers at the start of some of its programmes. The service is currently free from third party ads, and Hastings seemed committed to this, explaining that Netflix was simply “adding relevant cool trailers for other Netflix content you are likely to love.” Whether customers view these as “cool” or merely an interruption to their paid-for content is debatable. The Facebook comment was well received though, and currently has 1,440 likes.
Netflix is currently only showing trailers for its own original programming, including Daredevil, House of Cards and Orange is the New Black, and insists this is simply an experiment. In a statement to Business Insider, a spokesperson commented: “”As you know, we test hundreds of potential improvements to the service every year. Many never extend beyond that.”
The trailers were initially only seen by those viewing the service through an Xbox One, but later also by those using Roku and Tivo. The trailers varied in length, and while some could be skipped, other viewers had to watch the ad in its entirety before being returned to their programme.
There has been speculation on the direction Netflix will take. The standard Netflix UK service is currently £5.99 per month or £6.99 for HD streaming, and £8.99 for Ultra HD/4K streaming. The huge library of content is available on a range of devices, including games consoles, Mac and PC, mobile and tablet, and in January this year the company reported its worldwide subscriber base had reached 61.4 million.
Allowing third party ads on the site while lowering the subscription rate may attract new customers used to consuming content via YouTube or similar, but who are willing to pay a small fee for original content and better quality streaming. Alternatively, some fans of the service have speculated that Netflix may allow ads during programmes and offer the option of ad-free streaming only for those willing to pay a higher subscription fee.
In the meantime at least, Netflix has made its position clear, confirming in a statement: “We are not planning to test or implement third-party advertising on the Netflix service. For some time, we’ve teased Netflix originals with short trailers after a member finishes watching a show. Some members in a limited test now are seeing teases before a show begins.”