Well, I suppose it was only a matter of time: Netflix is testing advertisements in its online streaming service.
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. Motherboard’s Jason Koebler described the experiment as “the HBO model” since it’s only showing ads for its own original content, just like HBO does.
The company is only showing trailers for shows like Orange Is the New Black and House of Cards—it has not attempted to sell third party ads, and the company told me that, for the moment, only specific users in specific markets are seeing ads.
Nothing gold can stay.
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. Some analysts say the company needs ads to be profitable. 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. As long as people aren’t disgruntled enough to cancel their subscriptions in droves, it’ll help the company.
All beauty fades into oblivion.
I could see Netflix introducing a tiered pricing system at some point; I’ve asked for more information about the test ads*, and whether the company is considering a premium membership for people who can’t deal with ads interrupting their Friday Night Lights binge.
Everything we love will someday die.
*Update: Netflix says it has no intentions of adding third-party ads, so it looks like we’ll only have to deal with native ads for its own original series, which isn’t so bad. “We are not planning to test or implement third-party advertising on the Netflix service. 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,” a spokesperson told Gizmodo.
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