What Happened: In a recent earnings announcement, Netflix revealed growing revenue of $1.64 billion (compared to $1.57 billion three months ago) and an increase of 3.3 million new streaming members (compared to 1.7 million in the same time last year). These higher-than-expected revenue numbers can be attributed in large part to the popularity of the video streaming company’s original shows, such as Daredevil and Orange is the New Black. Netflix currently spends roughly $5 billion to create original programming, and all signs point to that amount increasing. In light of this impressive earnings announcement, Netflix reinforced its commitment to spending massively on creating its own shows, documentaries, and (in the not too-distant future) feature films. It is Netflix’s hope that eventually half of all videos in its streaming library will be original content.
What This Means for Brands: As Netflix ramps up its efforts to create original content and continues to make a serious dent in TV’s $65 billion ad game, brands that advertise heavily on cable television have to be more than a little bit wary of what the future holds. At least for now, it doesn’t seem like advertising opportunities will be available on Netflix and other major streaming services. In fact, even the mention of third-party ad testing on Netflix a few weeks ago sent the Internet into an uproar, and caused CEO Reed Hastings to swiftly and vehemently shoot down such rumors in a personal Facebook post. It is unclear what the future of brand messages will look like in the age of digital video streaming, but one thing is for sure: Marketers now, more than ever, face the unique challenge of figuring out how to get branded messages to an audience that would rather pay more for digital streaming services than have to sit through commercials.