Netfix Has No Plans To Put Ads In Streaming Videos

TV shows now represent half of what Netflix customers are streaming to their computers, gaming consoles and other devices. It has to be tempting for the company to look at those numbers and think about the cash it could make from slipping a few 15-second ads in during the already existing fade-outs. But, says a Netflix exec, that’s not what the company is all about.

Explains Netflix Chief Content Officer Ted Sarandos to paidContent.org:

We’re not getting into the advertising business, we’re not getting into content creation… The reason cable companies got into content creation was to differentiate themselves from other channels. We don’t need to do that. Our point of differentiation is our ability to provide discovery and personalization.

Streaming services like Hulu Plus still include commercials in addition to charging a monthly fee.

Sarandos also notes that the demand for streaming TV shows far outpaces the demand for TV shows on DVD, which he says has never reached more than 20% of that part of the business.

Digital Home: Netflix Balances The Benefits And Costs Of Broadband [paidContent.org via Hacking Netflix]

Comments

Edit Your Comment

  1. HogwartsProfessor says:

    That’s good to know. I’ve been watching the streaming much more lately. I do wish they’d get more good stuff on there. A whole bunch of old movies came on recently and more than half of them were B&W westerns I had never heard of. More B-horror flicks, please!

  2. BurtReynolds says:

    Yeah for Netflix. Maybe Hulu will wake from their coma and remove the ads.

    • Martha Gail says:

      I wouldn’t mind ads if there were just two, you know, one at the beginning and one in the middle. Every few minutes seems excessive.

    • MaximusMMIV says:

      Hulu sucks. An hour TV show has several minutes of commercials now. That’s fine for the regular accounts, but Hulu+ accounts shouldn’t have that garbage. Not to mention that when I’m watching the show, everything sounds great AND THEN THE COMMERCIAL COMES ON AT WINDOW SHATTERING DECIBELS AND NEARLY KNOCKS ME OFF THE COUCH!

      Oh, and $10/mo. is way too much for the content it has. I’ve heard rumors of a $5 price point, and I hope they’re true.

      Regardless, as soon as I finish Lost, I’m done with it (curse you for dropping it, Netflix!).

  3. minjche says:

    Just one more reason for me to keep getting Netflix.

  4. fsnuffer says:

    I hope not. I am getting fed up with the fifteen minutes of mandatory previews on DVDs you can’t “top menu” to.

    • minjche says:

      In my experience, if you use the “Chapter skip forward” button, it can skip past those ads to the menu.

      I recently rented a relatively new DVD (I forget what movie) and that was disabled, so I hope that’s not becoming more common.

      One nice thing about the Avatar DVD: no commercials or previews. James Cameron said “no” and the DVD folks said “How high? Oh wait, wrong question, but yeah we’ll take out the ads.”

      • SixOfOne says:

        That’s good to know. I’ve been waiting for the longer version to come out on blu-ray, and if they’ve cut all the ads, then that’s the icing on my Na’vi cake.

    • Gramin says:

      Two suggestions:

      1. Copy the DVD to your computer and stream it to your TV. I do that with all my DVDs and the software removes all previews.

      2. When the first preview/commercial starts, press the stop button. Then press play. This might allow you to skip all those annoying commercials. If that doesn’t work, Google this for suggestions. There are a few other tricks for skipping previews but I can’t remember them.

    • BurtReynolds says:

      Yeah some of them are pretty ridiculous. I watched “Date Night” from Netflix a couple weeks ago and it had what seemed like 7 or 8 previews. I just go to the fastest fast forward and wait till it gets to the menu. If I owned that movie, I really would be be bitter about having to deal with that any time I want to watch it.

    • Oranges w/ Cheese says:

      In general, if you place the DVD in the machine, wait for it to auto play and then hit stop once, then hit stop again, then hit play, in *most* cases, will begin the movie right off the bat.

      YMMV.

    • jason in boston says:

      The ripped versions don’t have this problem.

    • catastrophegirl chooses not to fly says:

      i put the movie in, then go make my snack while the previews are going

    • Dr.Wang says:

      I put DVD into drive, press play. Come back 20 minutes later and turn on TV. If it is not sitting at the prompt to play movie or run special features I shut off the tv and come back in another 10-15 minutes.

      If I ever buy a DVD and cannot bypass the ads I WILL return it to the store for a refund or mail it back to the studio and demand a refund, unless they want to pay me for airing their ads in my home.

    • Alessar says:

      The only thing that is supposed to be mandatory is the FBI warning. It’s part of the “spec” for DVDs that nobody else is supposed to use that lock feature. *yeah right look*

  5. Awesome McAwesomeness says:

    This is why I worship at the feet of Netflix and am a loyal customer.

  6. dolemite says:

    See, Netflix is smart…they understand why people flock to them and remain loyal.

    Now, for the life of me…I can’t figure out why I am paying $75 a month for cable. Every channel I watch bombards me with like 20 minutes of commercials every hour. It’s like I’m paying to watch commercials.

    • minjche says:

      The trade-off is that if those commercials weren’t on there, your $75/month cable would be higher than $75/month. Imagine if every channel were priced like HBO.

      It’s also greed, but hopefully the above explanation makes it a little easier to swallow.

      • Oranges w/ Cheese says:

        Yeah, but eventually it will hit critical mass. It’s started already with companies like Netflix making a killing and people converting to antenna / torrents.

      • chaosnoise says:

        I remember back when cable meant no commercials since that’s why you paid for it. Those with antenna TV had to deal with commercials.

      • HogwartsProfessor says:

        What bugs me is when they load the channels with commercials FOR THEMSELVES. I already have DirecTV; I don’t need to see ten commercials for DirecTV while I’m watching! That’s just irritating.

    • pecan 3.14159265 says:

      I don’t know why you’re paying $75 a month for cable, either. I pay $50 and I have DVR so I can skip all the commercials.

      • dolemite says:

        I’m paying $85 a month now, and that includes internet and a dvr.

        The catch is…that’s a promotional rate that I finagled, and it will go up to $115 in January.

        • mac-phisto says:

          well, when the promo’s about to expire, call up your provider & finagle it again. i would explain that you’re seriously considering dropping them completely in favor of a competing company.

          i don’t pay for cable anymore. only thing i really miss is the news in the morning, but i listen to it on the radio now on the way to work. still haven’t gotten used to the coffee in silence bit, though.

  7. pop top says:

    “Sarandos also notes that the demand for streaming TV shows far outpaces the demand for TV shows on DVD…”

    Well no shit. Instead of taking the time to cycle through six discs or however many there are, you can do the entire series in a few days or a week. I’ve never understood why American companies put so few episodes on each disc for TV series either. I bought the Japanese version of an anime series for a friend for his birthday, and the entire series, something like 30 episodes, was only three discs. I looked up the American version and it’s SEVEN discs. WTH?

    • Josuah says:

      30 episodes on 3 discs almost certainly means you bought a bootlegged version of the anime, with crazy levels of compression used to fit them all on. A legal Japanese anime will have the same number of episodes per disc as you find in the U.S.: usually 4 or 5 episodes. It will also look better and include the extras.

    • Mom says:

      Compression. Uncompressed, about 54 minutes of video will fit on a DVD. Twice that for dual layer DVD’s. To get 10 hours of video on a DVD would require a wicked compression rate, and the corresponding reduction in video quality.

    • skapig says:

      Image quality has a lot to do with it. You could get more episodes, but they won’t be as pretty. Of course it is sometimes artificial for the sake of raising perceived value (or actual value if they get paid royalties by disc? Not sure how this works).

  8. joe643 says:

    Will someone please explain why Netflix stories on this site include a picture of two cookies? Is Netflix so delicious??

    • EmanNeercs says:

      Yes. Netflix is dangerously delicious.

    • raydee wandered off on a tangent and got lost says:

      Probably a lack of netflix-themed pictures in the flickr pool.

    • Dr.Wang says:

      I took the photo to mean that the DVD was removed from the mailing envelope and the person is watching the DVD and eating oreo cookies while watching their rented whatever….

  9. slim150 says:

    I remember the CEO of netflix peddling his product on TechTV.. I thought then.. that was a nice idea but how can one guy battle with the movie industry. I’m glad for them.

  10. EmanNeercs says:

    I want to marry Netflix after a comment like this. In fact, I may offer up my future first born as well as a humble sacrifice to show how much I appreciate a small part of my internet NOT bombarding me with ads. Thank you Netflix… Thank you…

  11. He says:

    They do create content though . . . .

  12. MostlyHarmless says:

    This is why I love Netflix.

    Though to be honest, I would not mind a 15 second ads per 21 mins of episodes. And let’s face it. Sometimes a well placed ad break is a great cliffhanger. Even though it is only for 15 seconds.

    That coupled with funny/intelligent ads would actually not be bad at all.

  13. Oranges w/ Cheese says:

    WIN.

  14. Loias supports harsher punishments against corporations says:

    Netflix stays classy.

  15. kriswone says:

    Off topic I’m sure but everyone else is doing it.

    Cable companies should break down the pricing, i.e. ABC costs .01 cents per day.
    Then allow people to choose what channels they get, it would be cost effective for both the cable company and the consumer. I pay 75 bucks for what seems like 500+ channels, but i don’t want or need 40 music stations, 100 on-demand channels, 20 different but similar HBO channels, etc.

    I can go to mcdonalds and get a sandwich without the meal. I can get a car without Power windows. the list goes on…

    • brianary says:

      That’s called “a la carte” cable, and many have been calling for it for a long time, but most content providers (like Viacom) are against it, because they’d get less money.

  16. Engine-B says:

    By brain skipped over the “No” in the headline at first, and I got a little angry. I then got a bit confused when reading the article, but all is well now.

    I guess with all the recent headlines talking about more ads (I’m looking at you Hulu Premium), I assumed this was just another one of those articles about a company putting more ads into the content the offer.

  17. Cheap Sniveler: Sponsored by JustAnswer.comâ„¢ says:

    I did a recent trial membersip with both Netflix and BlockBuster:

    Netflix vs. BlockBuster: Who won? (as if you didn’t know!)

    After 1 month, I have netflix, no Blockbuster.
    BlockBastard charges PPV for streaming.
    My queue at BlockBastard is full of movies I never got because they are “long wait” or “very long wait”
    BlockBastard sent me Ironman, instead of Ironman 2: I had to go to redbox that night.
    BlockBastard charged me for my free trial! …and their only remedy is: A gift card, for a company that has no stores within 75 miles of me, and will probably go out of business before I get it, IF they even send it!

    Netflix? No problems. NOT ONE.

    Die, BlockBastard, die.

    • dolemite says:

      I had Blockbuster Online when it first came out. I was like the first person to use it at my local Blockbuster. At first, it was good.

      #1. Price was lower than Netflix.
      #2. Even though it took longer to get your movies (and the selection was worse), you could take them in and exchange them for 3 new releases AND Blockbuster would mail your next 3 as soon as they scanned the returns at the store (meaning you would end up with 6 movies at a time).
      #3. Each month I got a coupon for 2 free game rentals.

      Then…they messed up. They jacked up the price 2x over a 3 month period, so they were more expensive than Netflix. They dropped the free game rentals. They made it so you would have turn in your movies from the store before they would mail you anything else.

      Meanwhile, Netflix was adding streaming services, Blu Ray selection, etc. So over the same course of time, Blockbuster gutted their program, while Netflix improved theirs.

    • HogwartsProfessor says:

      I still run down to the store from time to time, because I don’t like the Redbox thing. As long as it stays open I’ll do that, but hopefully by the time they shut them all down Netflix will have even more on streaming.

  18. Tongsy says:

    Good to know. That’s less bandwidth NetFlixc will use when Usage Based Billing comes to Canadian ISPs

  19. suez says:

    I love Netflix, have from when they first started–and they’ve just reaffirmed it.

  20. yagisencho says:

    Netflix is rapidly becoming exactly what I’d been hoping for all along. If it weren’t for international programming that isn’t available elsewhere, we wouldn’t bother with cable at all.

  21. chaesar says:

    and this is why I give them money every month, and don’t foresee a future without it

    • chaesar says:

      Oh AND all the movies/shows to pick from, especially the “old movies” that Redbox CEOdouche talked trash on. I watched “Johnny Got His Gun” last week, freaking amazing WWI/anti-war movie from 1971, streamed through my TV, for free.

      • EarlNowak says:

        The only thing they’re missing is one of my favorites- the George Burns classic “18 Again”.

        It’s been “Availability Unknown” for years :(

        • raydee wandered off on a tangent and got lost says:

          Dang. That is one thing that I’d be interested in tracking down again someday, I baaaarely remember it, last saw it in like, the early 90′s …

      • nybiker says:

        Yes, that movie does make one stop and think about war and its effect on people.

  22. Croccydile says:

    Dear Netflix, if some hotshot VP ever makes the recommendation to throw ads in down the road… please remember I would pay double if that is what was required to keep Netflix ad-free. Then pound the VP with a fork into submission.

    Thanks. (And I’ve been a customer since 2002, and have loved it since)

  23. damageddude says:

    I streamed Lost (except for the last season obviously). Definitely the way to see a show like that. Watching Quantum Leap now and BSG is next.

  24. haggis for the soul says:

    I’m brand new to Netflix. I never liked the idea of tossing dvds into the mail, but I love streaming video (to the computer, and the Wii).

  25. ellemdee says:

    I just bought a Wii this week, in part because of the Netflix support. I’ve never used Netflix, but I only hear good things about the service, so I figure there must be something to it. I refuse to pay an extra $15/month for ONE premium channel, so for $9/month, streaming Netflix sounds like a much better alternative.

    It’s good to hear they’re not interested in inserting ads under the guise of “customizing the user experience”. I think we’re all so used to companies shoehorning in revenue streams (ads, selling personal info) wherever they can, that it’s refreshing to see a company just focus on what made them successful without testing customers’ annoyance threshold to squeeze out some extra ad revenue. Plus, I often watch TV on the lowest volume setting above mute (stupid migraines) and I hate having to race the commercials for the mute button so I don’t have to hear “Wow! That’s a low price!” or Billy Mays (RIP) yelling about Oxy Clean.

    I was disappointed to learn that the Wii doesn’t support DVD playback out of the box (unmodded) since my DVD player’s on the fritz and I figured the Wii would do for now, but that’s another issue. Weird that they would disable that option, when the HW’s capable.

    • oloranya says:

      I heard the Wii’s inability to play DVD’s was a licensing thing and they decided against it to make them slightly cheaper.

    • pecan 3.14159265 says:

      Did you not know that the Wii wasn’t capable of playing DVDs? Really? Seems to me if you were going to spend $100+ you would know this before buying.

      • ellemdee says:

        I wasn’t buying it for that purpose, so it wasn’t a big concern to me. Plus I got it for less than $130 new, so I wasn’t expecting the world, but that just seemed like a basic function that a system would have out of the box. I don’t watch DVD’s that often and I just figured it would fill in until I replaced my DVD player. Not a biggie or a deal breaker, it just suprised me a bit. For what I paid, I’m still very happy with the purchase.

  26. Dr.Wang says:

    Bull Pucky. They sell ad space on the inside of their DVD mailing envelopes. I’m sure they’re thinking about it. I guarantee they are thinking about running ads in streaming content.

  27. brianary says:

    The best reason to watch TV through Netflix instead of live is because of the overlay ads that cover up subtitles and other relevant, important content on a regular basis.

  28. Warren - aka The Piddler on the Roof says:

    Now if only Showtime (among networks) would stop forcing people to watch their bullsh!t commercials at the beginning of every ‘Dexter’ DVD…

    I’m glad Netflix is taking the high road on this. The second I start seeing ads in entertainment I pay for is the same second I cancel my membership.

  29. ClaudeKabobbing says:

    when they start charging me to watch commercials I will quit streaming.

  30. MurKam says:

    Discovery and personalization–that is what counts and Netflix is smart enough to realize this. Streaming offers choices and Netflix gives you the information to make meaningful selections. Just look at how they provide personalized recommendations and cross-links to similar titles. Hulu uses the old broadcast-with-ads model that assumes you are stupid enough to consume whatever the media corporations decide is the most profitable. Even a huge range of choices like Hulu offers is not enough when you want something you like instead of what happens to be popular with a bunch of other folks.

  31. narcs says:

    great news. when i watch a dvd i don’t get interruptions with ads popping up, why should it be any different streaming a movie that i’m paying a monthly fee for.

    .. though the second i see ads in something i’m watching on netflix i’m canceling my account.