Advertisers are confident that Netflix is going to one day have ads — or, at the very least, they really, really want Netflix to have ads.
Jorma Kremser, global media manager at Bose, said he expects Netflix to one day introduce ads — or significantly raise its subscription prices — during an advertising panel hosted by RTL Group and moderated by Digiday. Kremser said he can see Netflix introducing a pre-roll ad product, but was skeptical that the streaming service would embrace interstitials for fear of hurting the user experience.
Other advertising and media industry execs offer a similar sentiment. On a different panel, Antoine DuBois, svp of marketing global strategy at French hotel chain Accor, said he expects Netflix to one day have some type of advertising offering; Carlo Andrea Patticini, a media, ad production and procurement exec at Italy-based Barilla, said Netflix will need to because the other option is raising — maybe even doubling — prices.
Ads on Netflix have been a frequent topic of media and ad industry conversations — and often used as “bold calls” by those convinced that Netflix will one day have to offer ads. The reasoning is quite clear: Netflix has taken on tens of billions of dollars in debt and continues to borrow more money as it funds a seemingly endless supply of original movies and TV shows; and as the streaming service looks to grow in more price-conscious international markets, Netflix could significantly raise its revenue and profits by embracing advertising.
“Just look at the balance sheet,” said Daniel Bischoff, marketing director at RTL AdConnect, the ad sales division of European broadcaster RTL Group. “They will either need advertising or will have to raise prices.”