VOD : The future for linear TV channels

Originally Posted by theone2k10

Netflix have been going since 1997 and have never used commercial adverts and most likely never will, they are testing programme adverts though aka trailers of their own shows, according to AFTV netflix have already said they will never have commercial adverts.
OTA broadcasting is getting more expensive for providers you only have to look at the cost of freeview slots to see this however linear tv isn't going anywhere anytime soon isps are investing in tv now and even though bt,talktalk and plusnet tv is online they are still linear channels.

Linkage http://www.pocket-lint.com/news/1341...-we-be-worried

You may choose to trust them, but personally I find "we are not planning to" to be less than a watertight, door-slammed-shut commitment. To be fair, I wouldn't expect them, or any commercial operation, to say 'never' about anything. It would be too restrictive.

[theone2k10]

Originally Posted by Chris

Linkage http://www.pocket-lint.com/news/1341...-we-be-worried

You may choose to trust them, but personally I find "we are not planning to" to be less than a watertight, door-slammed-shut commitment. To be fair, I wouldn't expect them, or any commercial operation, to say 'never' about anything. It would be too restrictive.

If they haven't been showing comercial adverts for nearly 20 years i really can't see them starting now, they already now do a 3 tier streaming plan option this is how they will continue i think, but as you correctly say "never say never" end of the day money talks very loud.

Originally Posted by theone2k10

If they haven't been showing comercial adverts for nearly 20 years i really can't see them starting now, they already now do a 3 tier streaming plan option this is how they will continue i think, but as you correctly say "never say never" end of the day money talks very loud.

I agree 20 years is a long time. However, the market for VOD is changing, as several of you in this thread have been very keen to point out. Competition squeezes margins, while higher viewing figures increases the price rights holders can charge for their product. VOD carriers are likely to find themselves squeezed from both ends.

[muppetman11]

To be fair hasn't the Netflix streaming product only been around since 2007 , before it was a DVD by post business.

[theone2k10]

Originally Posted by Chris

I agree 20 years is a long time. However, the market for VOD is changing, as several of you in this thread have been very keen to point out. Competition squeezes margins, while higher viewing figures increases the price rights holders can charge for their product. VOD carriers are likely to find themselves squeezed from both ends.

This is true, i agree as demand increases so will cost for the content providers and we may see advertising slowly introduced via product placement.
On the otherhand Amazon are trialing a free version of instant video that is funded by advertising, if this is a success we could see netflix etc introduce a free service funded by advertising whilst keeping their standard version ad free and becoming a premium version,however i feel that the subscription price could increase if this happens.

[harry_hitch]

Originally Posted by theone2k10

This is true, i agree as demand increases so will cost for the content providers and we may see advertising slowly introduced via product placement.
On the otherhand Amazon are trialing a free version of instant video that is funded by advertising, if this is a success we could see netflix etc introduce a free service funded by advertising whilst keeping their standard version ad free and becoming a premium version,however i feel that the subscription price could increase if this happens.

Didn't the prices increase a few months back anyway? Isn't it £8.99 to watch the HD stuff now? Like you, I can't see it becoming cheaper in the future without adverts. I know they make vast profits, but surely they would not put the prices up unless they had to.

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Originally Posted by OLD BOY

Good point, Harry, but this is another question, the answer to which may become apparent with time. However, Netflix have already ruled out advertising on their services, and indeed it is the lack of advertising which is attracting people to use them.

The advertisers themselves will withdraw their advertising or pay much less for advertisements if people are being drawn away from broadcast channels in great numbers. True, they may move to on demand, but punters are not going to use on demand if they get flooded out with commercials as they are on broadcast channels and there are advert free alternatives available.[COLOR="Silver"]

Ads will to move to on demand - if that is they way of the future. I can not see a future in which there is no advertizements, there is simply too much money to be made from them.

[theone2k10]

Originally Posted by harry_hitch

Didn't the prices increase a few months back anyway? Isn't it £8.99 to watch the HD stuff now? Like you, I can't see it becoming cheaper in the future without adverts. I know they make vast profits, but surely they would not put the prices up unless they had to.

---------- Post added at 09:45 ---------- Previous post was at 09:32 ----------



Ads will to move to on demand - if that is they way of the future. I can not see a future in which there is no advertizements, there is simply too much money to be made from them.

There was a price increase yes £5.99p/m for 1 screen sd only, £6.99p/m for 2 screens and hd and £8.99p/m for 4 screens and ultra hd.
I only pay £4.68p/m for 2 screens plus hd as i used a vpn and subscribed via canada netflix.

I think Netflix are making a boast out of something they have little control over anyway. Until they reach mass-market penetration, their ad space isn't actually worth very much. It may be that they think, at this stage, the ad-free proposition is worth more to them than the modest revenue they would get from flogging price comparison websites and personal injury lawyers.

[theone2k10]

Originally Posted by Chris

I think Netflix are making a boast out of something they have little control over anyway. Until they reach mass-market penetration, their ad space isn't actually worth very much. It may be that they think, at this stage, the ad-free proposition is worth more to them than the modest revenue they would get from flogging price comparison websites and personal injury lawyers.

They already are reaching mass market penetration according to wiki http://en.wikipedia.org/wiki/Netflix they already have over 60 million customers.
Netflix have also announced they will be launching in Spain, Portuagal and Italy in October with more regions to come.

Edit nearly forgot netflix link http://www.ubergizmo.com/2015/06/net...gal-confirmed/

[johnathome]

Not sure how they're going to get on in Spain, a lot of small towns still have dial-up!

[Stuart]

Originally Posted by theone2k10

They already are reaching mass market penetration according to wiki http://en.wikipedia.org/wiki/Netflix they already have over 60 million customers.
Netflix have also announced they will be launching in Spain, Portuagal and Italy in October with more regions to come.

Edit nearly forgot netflix link http://www.ubergizmo.com/2015/06/net...gal-confirmed/

Where did you get that 60 million from? IF you add up the 2011 figures that comes to around 60 million, and the page says that they are adding 7 million a year, which sounds impressive until you realise that their potential market consists of the US, Canada and most of Europe. 7m is a fraction of the population of those countries.

Originally Posted by theone2k10

They already are reaching mass market penetration according to wiki http://en.wikipedia.org/wiki/Netflix they already have over 60 million customers.
Netflix have also announced they will be launching in Spain, Portuagal and Italy in October with more regions to come.

Edit nearly forgot netflix link http://www.ubergizmo.com/2015/06/net...gal-confirmed/

"Market" and "Customers" are two entirely different things. You can't just go on the internets, google up a great big number, and then declare you've made your case.

Netflix may well have 60 million customers worldwide, but they are spread across many and diverse markets. Within the UK market, which is what we are discussing here, they had 3 million customers as of late last year. The average size of a UK household is 2.3, which implies an absolute maximum audience for Netflix of 6.9 million at any given time, assuming there is ever a time when every member of a subscribing household is sitting down and watching Netflix at the same time. This is extremely unlikely. Consider, for example, that the nearest the UK gets to all watching the same thing at the same time is whatever is on BBC One in the late afternoon or early evening on Christmas Day, and that attracts about 12-14 million.

Of course, you might reply, that's all besides the point because the whole point of a service like Netflix is that it doesn't rely on everyone watching at once. However, the advertising of mass-market consumer brands *does* rely on that. Big brands have big campaigns which run on a scale designed to get potential consumers talking about them. That is much more difficult to achieve if you can't reach a large audience, or you can't reach a large audience all at once. A 30 second slot in the ad break in the middle of Corrie is worth £50K to £100k for good reason.

[theone2k10]

Originally Posted by Stuart

Where did you get that 60 million from? IF you add up the 2011 figures that comes to around 60 million, and the page says that they are adding 7 million a year, which sounds impressive until you realise that their potential market consists of the US, Canada and most of Europe. 7m is a fraction of the population of those countries.

From the wiki page obviously wiki pages are debateable "As of mid-March 2013, Netflix had 33 million subscribers.[12] That number increased to 36.3 million subscribers (29.2 million in the U.S.) in April 2013.[13] As of September 2013, for that year's third quarter report, Netflix reported its total of global streaming subscribers at 40.4 million (31.2 million in the U.S.).[14] By the fourth quarter of 2013, Netflix reported 33.1 million U.S. subscribers.[15] By the first quarter of 2015, there were more than 60 million subscribers globally!

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Originally Posted by Chris

"Market" and "Customers" are two entirely different things. You can't just go on the internets, google up a great big number, and then declare you've made your case.

Netflix may well have 60 million customers worldwide, but they are spread across many and diverse markets. Within the UK market, which is what we are discussing here, they had 3 million customers as of late last year. The average size of a UK household is 2.3, which implies an absolute maximum audience for Netflix of 6.9 million at any given time, assuming there is ever a time when every member of a subscribing household is sitting down and watching Netflix at the same time. This is extremely unlikely. Consider, for example, that the nearest the UK gets to all watching the same thing at the same time is whatever is on BBC One in the late afternoon or early evening on Christmas Day, and that attracts about 12-14 million.

Of course, you might reply, that's all besides the point because the whole point of a service like Netflix is that it doesn't rely on everyone watching at once. However, the advertising of mass-market consumer brands *does* rely on that. Big brands have big campaigns which run on a scale designed to get potential consumers talking about them. That is much more difficult to achieve if you can't reach a large audience, or you can't reach a large audience all at once. A 30 second slot in the ad break in the middle of Corrie is worth £50K to £100k for good reason.

Fair point but Netflix is still fairly young in the uk, Rome wasn't built in a day, ofcourse adverts on terrestial linear channels will be worth a hell of a lot more than potential adverts on online services such as netflix as linear tv is more widely available than fast broadband.
Something like let's say 2020 we could see that change as faster broadband becomes more widely available (no this won't be the end of linear tv ob ) the ad revenue for online services would come more closer to inline with ota broadcast services. we will see i think more in the line of product placement in shows made by companies such as netflix rather than actual commercial adverts.
Product placement can bring in a tidy sum, even BBC do it on some of it's shows.

Originally Posted by theone2k10

Fair point but Netflix is still fairly young in the uk, Rome wasn't built in a day, ofcourse adverts on terrestial linear channels will be worth a hell of a lot more than potential adverts on online services such as netflix as linear tv is more widely available than fast broadband.

Which was exactly my point. Netflix may well be trying to make a virtue out of the fact they don't run adverts, simply because being able to say that is worth more to them than they would make if they actually sold advertising space, as their audience size is meagre.

[theone2k10]

Originally Posted by Chris

Which was exactly my point. Netflix may well be trying to make a virtue out of the fact they don't run adverts, simply because being able to say that is worth more to them than they would make if they actually sold advertising space, as their audience size is meagre.

Ah now i see what you mean and i agree.