Why Some Netflix Users Are Suddenly Seeing Ads

2 Jun 2015 | Author: | No comments yet »

Cutting the Cord: A new user interface coming to Netflix on the Web.

It looks like Netflix is experimenting with ads — not that people have to worry about old-fashioned commercials interrupting their favorite political dramas. On Monday news reports from Cord Cutters News and Motherboard indicated that Netflix was playing around with pre-roll and post-roll advertisements for some of its content.Streaming TV provider Netflix has always shied away from advertising, preferring instead to make money from a monthly subscription it charges users to gain access to its content.

The company hasn’t confirmed whether it’ll roll ads out on a wider scale, but it’s experimenting with showing advertisements for its own programs at the beginning and ending of streaming content for people watching on Xbox 360.All subscribers to the popular video-streaming service are expected to get the new interface next month, but Netflix is letting a subset of its members — including this journalist — test the updated software. But take a deep breath, Netflix fans, you are not about to start getting Hulu-style ads before your binge-watch the upcoming season of Orange is the New Black or nerd-out over some classic episodes of Cheers. “We are not planning to test or implement third-party advertising on the Netflix service. The white background has been replaced with the black one that’s found on Netflix apps across other platforms such as tablets and video game consoles. Some Netflix users have been forced to sit through short promos for the service’s own original content, inserted at the start or end of other shows they’ve watched. “We are experimenting with pre-rolls teasers for our original shows, just like we have been doing with post-roll for awhile,” Jonathan Friedland, Netflix’s head of communications tells Quartz via email.

As spotted by Cord Cutter News, those test spots initially appeared during user viewing sessions as post-roll ads at the end of a show or episode, but recently Netflix has begun testing out pre-roll teaser ads on some devices as well. “We’ve had originals teasers at the end of shows for a while. Netflix has a jumbo bucket of money to gain from introducing third-party ads, especially since its powerful recommendation software means it has a leg up in targeting.

Of course, one of the reasons Netflix has been able to grow its huge global subscriber base (60 million users and climbing) is because so many customers are willing to pay for ad-free content. After all, the premium cable and streaming video channel HBO, Netflix’s feted rival, also makes a big deal out of being advertisement-free, and it does a similar thing before its shows.

And while people are pissed about the test ads, competitors like Hulu Plus already have them from third parties, so the native ad testing is still less obnoxious than that. Many never extend beyond that.” Frankly, as Netflix expands into more original content, using the service as a way to surface more of that content — especially if targeted at users who might like said content — makes a lot of sense. It also makes sense for Netflix to push its own shows (it is already advertising them heavily on broadcast and cable TV), which are increasingly becoming the main reason to subscribe to the service. Should you find a movie or TV program that interests you, hover the cursor over it and the icon expands to give you more information — date of production, approval rating and MPAA rating, and a brief synopsis.

Motherboard’s Jason Koebler adds: It’s worth noting that, though Netflix hasn’t had any ads so far, it has the potential to deliver much more targeted ads (which can be sold for higher rates) than a standard cable company. Already, Netflix has used its algorithms to customize the user experience so that my profile sees different shows and recommendations than what my husband sees on his profile.

Netflix is generating relatively modest profits at the moment, but its expects its profitability to increase substantially in 2017 once its global expansion is complete. Check out a new episode on HBO Go or HBO Now, for instance, and you’ll probably see a 30-second clip featuring the new season of True Detective or the upcoming Dwayne “The Rock” Johnson series Ballers. In the same way, Netflix’s pre- and post-roll spots are meant to get viewers interested in what is a growing stable of shows that are entirely new, or just entering their second or third seasons. The service is hoping to keep users interested in new programming, which is especially important once they’re finished binge-watching the latest season of whatever the most recent original to launch is. Unlike HBO, which can stretch out a series run over 10 or 12 weeks by releasing one episode per week, Netflix typically drops all new episodes of an original show at once, which means a much shorter amount of time before subscribers are searching for something new to watch.

This improvement, the first to Netflix.com in four years, “moves away from the outdated brick-and-mortar video store concept to one that’s more immersive, with more information in one place than ever before,” said Cliff Edwards, Netflix’s director of corporate communications and technology. “It takes advantage of high-quality screens and our predictive algorithms to deliver the right information to the right people, in an easy-to-browse experience.” It also will be used to help personalize your experience and help Netflix learn what its subscribers want, reported tech news site The Verge after a sneak peek of the update at Netflix. “Under the hood,” it said, “the changes are the culmination of years of research aimed at gleaning every nuance about how humans hunt for things to watch.” “Cutting the Cord” is a regular column covering Net TV and ways to get it. While Netflix is looking to spur interest in original or exclusive programming, the company is adamant that it’s not looking to use the same tech to run third-party ads on its service.

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