The Netflix Effect: What the rise of video streaming sites means for marketing.

Brogan & Partners 08/15/14 - 5:30 pm

Is Netflix killing cable? This may be a little overdramatic, but the fact remains that more and more viewers are shifting away from traditional cable programming and toward internet video streaming instead.

Video streaming services like Hulu, iTunes and Netflix are soaring in popularity. These sites allow for far more choice and personalization with regards to programming than traditional cable. Thousands of episodes of hundreds of shows are available at the click of a mouse. Gone are the days of checking the TV guide to determine when a favorite show will be available for viewing, gone are the days of waiting a week for another episode.

Well, maybe not gone. But fading, certainly.

Currently, Netflix has over 35 million subscribers – about 5 million more than Comcast. Additionally, 55% of Netflix users say they’re watching less cable television as a result of their subscription. Many vaguely hysterical articles claim that Netflix will be the death of cable—that it’s only a matter of time before online streaming replaces cable TV entirely.

Netflix is not a free service, but for the low, low price of $8.99 a month, users can have hundreds of TV shows at their disposal, completely free of advertisements. That’s right—Netflix does not have ads. Even Hulu, which does sell ad space alongside its programming, doesn’t come close to matching the amount of space available for ads that traditional television provides. Netflix chief product officer Neil Hunt says marketers will “need to find a different place to advertise.” This shortage of available ad space as a result of the changing face of television is casually referred to as The Netflix Effect. Strategies like product placement and social media use are becoming increasingly popular as opportunities to place TV ads continue to dwindle.

Do you think Netflix will be the nail in cable’s coffin? Should marketers be on the lookout for new ways to get their message across, or will TV commercials remain a tried and true advertising format?

Blog Category: Branding

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