According to reports from the Cord Cuter News, Netflix Inc. (NASDAQ:NFLX), the largest subscription streaming service in the world, is reportedly toying with the idea of showing advertisements from its own programming before the next show hits the screen. This means that the next time a viewer streams on Netflix, expect a promotional ad, such as Marvel’s “Daredevil”, to show up.
A spokesperson for Netflix confirmed that the company is ‘experimenting’ with the use of ads only for trailers in its Netflix originals, such as the political thriller “House of Cards”. He said that they have tested hundreds on new potential improvements in their service and most do not go beyond the said.
Cord Cutter News has reported that most of the trailers have appeared on subscriber’s devices, such as the Xbox gaming consoles, Roku streaming boxes, and for some people, appearing both – before and after – a particular show starts.
As for third party advertising, the spokesperson ruled out any of that, meaning instead of any ads, such as Ford or General Motor model cars showing up, only ads of movie trailers or teasers will be shown exclusively on Netflix TV programming. CEO, Reed Hastings, made that even clearer in his Facebook post yesterday afternoon.
The streaming giant has the knack to tweak with its user interface, coming up with techniques to get more viewers to stream more often, to help them discover some movies, which the company thinks that subscribers most likely will love to watch. To this end, it is testing out a new feature for a select few subscribers, and if it receives a thumbs up from the small representation of TV subscribers, roll it out for the wider range of viewers.
However, there is a catch though; not all subscribers can be expected to see the promos of the show, since the company only makes its income from subscribers who stream frequently to make it more valuable. Netflix enjoys a favorable position in streaming market, but the said position comes along with fierce competition.
Assuming the tough competition out there, with more than 60 million paid subscribers, the company has to invest millions of dollars to develop its own content to differentiate itself from its other competitors, such as HBO Now, Amazon Prime, and Hulu Plus. In fact, it plans to spend more than $450 million this year, which represents a less than 90% jump.
Netflix’s stock price ended the day at $623.02, a loss of 0.15% from the previous day.