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2 June 2015
- From the section Technology
Netflix has begun showing trailers at the start of some of its programmes.
But the TV and film-streaming service has stressed it remains committed to providing an ad-free service.
There had been questions about the firm’s plans after news site Motherboard reported that the firm was “experimenting with advertisements”.
However, Netflix later made clear that the tests were limited to trails for its own original programming and would not be seen by all users.
“We are not planning to test or implement third-party advertising on the Netflix service,” it said in a statement.
“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. We test hundreds of potential improvements to the service every year. Many never extend beyond that.”
The firm’s chief executive Reed Hastings reinforced the point in a personal Facebook post, in which he wrote: “No advertising coming on to Netflix. Period.”
This has helped to address a brief backlash on Twitter and other social media.
Show promotion
There has long been speculation that Netflix might eventually seek to introduce third-party ads.
Despite having increased its audience to more than 40 million paying subscribers, the firm reported a net profit of only $23.7m (£15.6) for the first three months of the year, which was less than half the amount for the same period in 2014.
Last month, Sir Martin Sorrell, chief executive of the marketing group WPP, suggested Netflix might eventually feel forced to run ads to help cover the cost of payments to rights-holders.
“Netflix will have to raise subscription prices – and we know what happened last time – or have alternative revenue generation opportunities, one of which will be advertising,” the Guardian newspaper quoted him as saying.
One of the firm’s internet-based British rivals, Now TV, already regularly runs trails for its own exclusives at the start of selected shows as well as interrupting programmes to run idents that promote its parent company Sky’s brand.
However, it has also opted not to run ads for third-party products even though they appear on Sky’s satellite channels.
Other pay-to-watch on-demand services also tend not to interrupt their content with ads, with the notable exception of Hulu Plus in the US.
“One of the effects of the shift to on-demand and over-the-top services is that audiences no longer move from one programme to another the same way,” commented Ian Maude from the research firm Enders Analysis.
“In the on-demand world you can’t promote shows and build audiences through the schedule.
“You are not tied in with Netflix in the same way you would be with a year’s subscription to a pay TV package, so the company already uses algorithms to show you a selection of titles you might like at the end of a programme, and it will keep experimenting with other ways to keep you hooked.”
