Netflix confirmed last Monday that it is now testing ads across the platform, during the seconds before a new episode of a series begins playing. At the moment, binge-watchers are shown “recommendations between episodes.… to help members discover stories they will enjoy faster”. The company has also noted that subscribers are able to skip a video preview at any time if they are not interested. Regardless, users are not impressed and reports have confirmed that some Australian subscribers have been affected in this trial process. A number of users were quick to complain on social media, arguing that they pay for the streaming service to avoid ads.

The TMS Take

While the trial stage of Netflix ads has only promoted other programs available (equivalent to program cross-promotion that both commercial and non-commercial stations already do) and has not featured brand advertising, you can assume the streaming service may eventually commercialise this aspect of their business.

As the popularity of streaming services continues and Netflix is the leader in the Australian Subscription Video on Demand (SVOD) market with a 38% share, advertising on Netflix could offer an exciting addition to the dynamic digital media landscape for brands. To avoid consumer backlash Nettflix should look to create a commercial opportunity that attracts premium / contextually relevant advertisers with minimal clutter that doesn’t interrupt but provides value back to consumers.

Cindy Luu