Netflix Is Making the Right Decision About Accepting Advertising

This was all predictable; many, in fact, have been predicting it for years. It would have happened sooner, but the linear networks and stations waited like Netflix did, until they just had to move off the dime and launch streaming services. This unnecessary delaying of obvious good moves has been a characteristic of the advertising and media business for as long as I’ve been around. I once thought the idea of addressable commercials was such an obvious win/win I could get it off the ground in one decade, whereas it’s taken three.

The quality of the programs and their degree of originality was in Netflix’s favor. Among the mature networks, CBS was among the first to offer another new generation of proven programming, Star Trek in this case, exclusively on its streaming network, and now finally everyone’s doing it, and the combined power of all these pros had to have the effect it had on Netflix.

It's a good time to be a track record creative in the TV/movie business. It should have always been this way. The next wave of competition will come when someone opens the door to brand new talent with no track record in any media. When that happens, the doors will blow off the business and the big may suddenly become smaller as the enormous pent-up supply of quality newcomers is allowed to hit the market.

The vast amount of talent who never make it bothered my father, who took folks under his wing and encouraged them to never give up, reminding them of their great performances and how it is all slowly coming their way. In my tribute video to Ned Harvey, Red Buttons expresses this better than I can. I saw all the frustration of great "undiscovered" talent as I was growing up, and in pitching my scripts I see things have not changed to this day. You have to work all your life to become an overnight success, Ned told us.

Authenticity is the hallmark of the undiscovered artist, and it comes through in their work when they finally do get up to bat. We've seen that on shows like American Idol and one day we'll see it for writers and directors, too.

In my recent interview with Tom Ziangas I praised Crown Media for their wisdom in offering a full spectrum of services, ad-free and well as ad-supported. This spectrum of services idea was never expressed better than it was in the kickoff keynote of the annual ARF AUDIENCExSCIENCE conference by NYU's and Fordham's Evan Shapiro.

Offering some free advice to Netflix, for one thing, consider well the options you offer to viewers. You obviously want to keep the flagship, and have a free ad-supported service, but what about additional options in between? There's room for ad-lite services in the middle, perhaps an array of them, so that as people consider the slate, they upgrade themselves up from free in order to get some of the holdback premium programming. There's a lot of room for creativity in the packaging.

There's room, for example, for an ad-lite premium tier with not only fewer ads but also ads that flow perfectly with the programming, because the ads are matched into programs with many of the same psychological qualities. "My" company RMT exclusively uses the 265 psychological attributes discovered by "my" earlier company Next Century Media (Emmy®Award-winning NCM) to enable this tier not only for Netflix but for everyone in the streaming business looking to optimize their offerings. The fact that in this tier the ads will not break the mood of the program will become a draw for acquisition.

Finally, Netflix (and everyone else in streaming), don’t forget live programming and its added attention and sales effect. Sports and news have higher attention and sales because of the psychological dimensions of "it's happening right now," surprise, mass shared experience and personal skin in the game. Take a clue from what Amazon is doing in sports and see if you can do some of it better. Don't fall behind in that. The positive effects of live programming rub off on your total brand image, as Fox has conclusively proven.

May the best team win! May we all win!

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