AdLib: Netflix ad break is success story
Netflix is not about advertising, it's a screen entertainment subscription service where the consumer is king. Netflix CEO Reed Hastings shied away from talking about advertising at the World Mobile Congress (WMC) in Barcelona.
The streaming service, which has created a popular media brand without ads has advertisers, broadcasters and producers in its grip.
In a villa overlooking the Catalan city, Netflix hosted meetings during WMC. Vice president for product innovation, Todd Yellin, insisted Netflix isn't tempted to trial ads with a Spotify-style 'freemium' model, even though Netflix runs regular tests on subscribers. By streaming such high-quality, original dramas as 'House of Cards'), 'Narcos' and 'The Crown', Netflix has notched up 94 million subscribers - a trebling in growth since 2012.
Yellin said what has kept him at Netflix for 11 years is that they have only one master: the subscriber, or, rather, "the customer". Compare that to Facebook and Google, where they must toe the line with advertisers.
"It influences the storytelling when you get rid of ads," Yellin said. "When you've all those commercials that we have on American TV, you have to write for that structure of 'leave it hanging at the end, extend it for the ad break'. When you don't have to write for it (the ad break), it really frees up the creative."
However, Yellin doesn't think the video ad spot is in danger. But he's adamant that while ads won't go away, viewing will become more on-demand. While mobile is growing as a Netflix platform, two-thirds of viewing across 130 markets is still on the TV screen.
Only in India, Japan and South Korea does Netflix viewing on mobile out-smart the TV set. Drama is Netflix's most popular genre on mobile because its shows are 'page-turners' and subscribers can't wait to watch the next episode. Netflix uses data to divide content into tens of thousands of sub-genres and is focusing more on picture quality. Video compression technology increases the density of screen pixels.
Netflix plans to store its entire catalogue on servers at local internet service providers rather than in its own offices. The move will reduces the time for the video signal to reach the viewer. Adaptive streaming improves picture quality to suit broadband strength, to avoid buffering and data caps. Netflix has also launched downloads and menu tweaks to make it even easier to use.
Sky Entertainment executives were in Dublin last week. Speaking to Irish TV producers at the Marker Hotel, director of programmes Zai Bennett said they were all on for spending money on great new ideas, like they did with Chris O'Dowd's Moone Boy. Bennett said it's about giving people telly that's worth paying for and reducing churn.
On the movers front, Heineken Ireland marketing manager Karl Donnelly is taking up a new post at Three mobile as head of partnerships. Donnelly has held marketing and sponsorship roles at Heineken for the past five years. Before that, he was head of Digicel's group sponsorships in Jamaica and was Basketball Ireland's commercial and marketing director. Gemma Bell is joining group communications at Bank of Ireland. Bell has been in sponsorship and PR roles at Diageo for the past five years and previously worked at Coca-Cola. Also on the move is Geraldine Kearney, who joined Glanbia as head of corporate affairs 13 years ago from PR agency Murray. She was global sustainability director for the past two years and now has plans to specialise in it as a consultant. Former Labour Party leader chief of staff Mark Garrett now manages Glanbia's corporate affairs.
As organisers of the Sharks international creative festival held in Kinsale, Co Cork, each September step up their efforts to attract agency interest, Aisling White has been appointed new festival director. White's job will involve canvassing agencies and signing up creative directors, copywriters and art directors as delegates.
White was an account director at Kennedy PR, where her clients included Taste of Dublin, the IFTAs and the Persil Irish Fashion Awards. She was also with Bell Advertising, Des O'Meara & Partners and the Irish Press group. She will work alongside former Wieden + Kennedy Amsterdam and D&AD creative awards boss Tim O'Kennedy in framing the festival's speaker line-up. Last year, UK-based Creative Social was hired to manage Sharks' content.
This week's big news in adland centres on Rothco business director Aoife Moore's move to DDFH&B as managing director, working alongside agency CEO Miriam Hughes. Target McConnells has announced Michael McCann as digital experience and performance director. Founder of Opt In Media, McCann joined the agency in 2014 and has worked on Vodafone, Topaz, An Post and Aer Lingus.
Michael Cullen is editor of Marketing.ie; firstname.lastname@example.org