While I didn’t run across any during a cold-weather binge this past weekend, several sources are reporting that Netflix users have begun to see pre- and post-roll ads before/after viewing some of the network’s original content.
The Netflix original content ads were first spotted by the folks at Cord Cutters News on May 26th. The company has since confirmed that they are indeed testing advertisements for original content; however, they’ve noted that there are still no plans to sell ads to third-parties.
While the current original programming ads are nothing to worry about themselves — premium cable channels such as HBO & Showtime run spots for their original content in the same manner — there is a very real possibility that, at some point, Netflix will need to embrace some sort of ad-supported model to stay afloat. Though the company recently posted record subscriber & revenue numbers, Netflix is years from breaking-even.
With increasing competition in the streaming space, Netflix will continue to need to invest in original programming & the exclusive post-broadcast rights to television shows and movies — this, in addition to infrastructure upgrades, which will also continue to be necessary, likely means that costs will outpace subscriber revenue for some time.
Netflix ads, however, have the potential to be highly targeted (Netflix probably can infer more about you, based on viewing habits, then most of your friends), which would certainly appeal to advertisers. The obvious downside is the likelihood for user outrage — and subscription cancellations — if Netflix began running ads, even if they are only before or after viewing content.
For now, these original programming ads on Netflix aren’t really anything for users to be concerned with; the company has stated that not all members will be exposed to this test (as I was not), and it’s not even running in all regions. But, as Netflix continues to push for original & exclusive content, there’s going to be a need to offset costs wherever possible; meaning, some form of third-party advertising on the platform aren’t beyond the realm of possibility.