SVoD: Advertising in an Ad-free World
The rumours you heard are true, Netflix is now showing ads promoting its content between episodes. Although this is as yet only a trial revealed to a handful of subscribers, the implications therein are intriguing. So far, the response has been negative; viewers are reportedly aggrieved by this unsolicited interruption to their viewing. In fact, the resentment has been so acute that some have threatened to dump their subscriptions. A great emphasis has been placed on the medium’s appeal as an ad-free environment, with uninterrupted streaming its ‘raison d’être’.
Consumers drive change, that’s a given. With this shift in media consumption from advertising to subscription-based models, it’ll be interesting to see whether advertisers will be coerced into a new approach. Spotify already paved the way in proving that many people will happily give up their cash in exchange for ad-free radio. Consequently, individuals who begin by subscribing to one media channel are also likely to adopt others.
Business is a machine; it’s built to crave efficiency and thrives on the basis of that delivery.
As the subscription mechanic becomes more streamlined, shiny and attractive, could it be that the ultimate consumer experience is one devoid of advertising? For if OTT evolves to the stage that its natural balance prevents advertising, then exactly what recourse do brands have to punch their messages out there? The answer of course, is staring us in the face: linear TV and VOD.
ITV’s Hub has already enjoyed a blistering year with 25m registered users (including an astonishing 75% of 16-24 olds) and a record 9.7m requests at the height of the Love Island mania (the World Cup also drew an enormous level of catch-up). Channel 4’s All 4 has also been enjoying record reach, fuelled by 17m registered users across 26 platforms, the crux being that both it and the Hub are available for free.
There’s now a debate of resuscitating Project Kangaroo, an initial venture mooted back in 2008 to create a one-stop shop for streaming for the UK’s biggest broadcasters. By forming an alliance, these key UK strongholds could potentially produce a UK rival to Netflix and Amazon. With continued concern at the viability of the license fee, it’s perfectly conceivable that ITV, 4, Sky and the BBC may yet create a streaming portal of immense value to advertisers. Alarmist forces squeal wolf at plummeting audience levels, but correctly harnessed this most resolute of mediums will continue to deliver shimmering results for our brands.
Head of Broadcast