August 20, 2018
Netflix reportedly has begun testing streaming video ads of original content to select subscribers. The ads appear during binging sessions and other content viewing.
“We are testing whether surfacing recommendations between episodes helps members discover stories they will enjoy faster,” Netflix said in a statement first reported by ArsTechnica.com.
The world’s largest SVOD service – along with Amazon Prime Video – has shunned running advertising or any kind – a stance it says it would continue as the video spots are not for third-party content or products.
Hulu has run third-party and house ads since launching in 2007. The service co-owned by Disney, Fox, Comcast and WarnerMedia also offers an ad-free option at a premium price.
Netflix said the house ads can be skipped and underscore its desire to expedite a user’s streaming experience with recommended content suggestions based on user data.
Indeed, users to the Netflix home page are now subjected to video previews when hovering the cursor on a particular program or movie.
“We are testing whether surfacing recommendations between episodes helps members discover stories they will enjoy faster,” said Netflix.
Response on social media to the test ads appeared largely negative, with many comments falsely suggesting Netflix would begin marketing products and services to subscribers.
“Autoplay anything makes me more likely to choose a competitor, or just shut the TV off and do something else,” wrote one subscriber on Reddit.com.
Michael Pachter, media analyst at Wedbush Securities in Los Angeles, doubts Netflix would pursue third-party ads going forward. The analyst contends the ads could be a way to enhance the service’s longstanding “personalization algorithm.”
“They are too far down the rabbit hole to spring commercials on their customers,” said Pachter. “I think it will be poorly received and subscribers will complain.”