Netflix, arguably the industry's leading instant-streaming provider, is going to undergo a major change later this month when its sleek redesign is launched to make its interface more user-friendly. Improvements like updated carousels and a single master home screen look to enhance the Netflix experience, but the company isn't going to stop altering things there.
One of Netflix's most noteworthy features is that it doesn't have advertisements, meaning viewers can watch their favorite shows commercial-free. This aspect may be eliminated, depending on how a new test goes - now that Netflix is experimenting with placing advertisements before and after its videos, that is.
The news comes courtesy of Motherboard, which is reporting that only certain users in specific markets will see the ads, and there is no plan right now to push them to all subscribers. Currently, the only ads being featured are trailers for the service's original programming such as Orange is the New Black and House of Cards. Netflix spokespeople say they will not be adding third-party commercials, and that this is merely a test to show off their exclusive content.
This move is a little bit of a flip-flop on Netflix's part, as their executives have said in the past they had no intentions of introducing an ad model. Some users on Twitter have expressed displeasure with the ads, but Motherboard notes that it's difficult to know what the widespread consensus is because it is unknown how many users are seeing them. Still, after years of commercial free programming, one can understand why Netflix customers would be a bit perturbed by the presence of them, even if they're just for other Netflix shows.
This doesn't seem like a big deal (yet), it's worth bringing up because it poses a question: should Netflix run ads during shows? Regardless of what they say, it does make business sense for them to move towards having ads, as it will add a nice sum of money to what're already hefty profits. Not only that, some analysts say Netflix will inevitably have to go down this route in order to remain a viable enterprise. Apparently 62.2 million worldwide subscribers paying $7.99 per month isn't quite enough to run things as the service becomes more and more prevalent in the new millennium.
If Netflix decides to incorporate an ad model, it will also benefit more from it than a standard cable company would. This is because Netflix's algorithms would allow for targeted commercials (which can be sold for higher rates) that play to the specific tastes of an individual consumer. Netflix, of course, has a detailed history of what shows and movies a user has seen, which means the service can infer what your biggest interests are and run a string of ads that are relevant to you.
Obviously, users can threaten to cancel their Netflix subscriptions if they feel like watching a few adds is a great injustice (and that would probably encourage Netflix to remain as is), but it's not exactly practical. Netflix has a majority of the leverage here, since they not only have a library of hundreds of must-see movies and TV shows, but also popular original titles like Marvel's Daredevil and Unbreakable Kimmy Schmidt that people would miss out on if they jumped ship.
As Netflix gets bigger, they keep evolving, and this may be a necessary evil to maintain the company's standing in the industry. At least you can still get everything streamed to your home.