I was looking at the news yesterday in the Internet and I saw an interesting article about Netflix using ads in some accounts. Now of course it was a test run, and Netflix said that they were always testing new things, but by no means it indicates they will launch such thing. Now obviously that got me thinking, why would Netflix add something that people have expressed they are not okay with? Of course everyone opposes ads, they take time away from our lives, and nobody really likes to watch something unrelated to what they are trying to watch.
Netflix came out saying today that they will not be launching ads into their movies and shows, and it was just a test. But the truth is if they weren't really looking towards adding them, then why did they test it in the first place. Adding something to Netflix implicates money in man power and man hours, and is not certainly something you can just add with the click of a button.
Obviously people were upset to find out. The main reason why people subscribe to Netflix and stop paying for cable TV is because it is cheaper and it doesn't have ads. I know that is the main reason I do it. It is a way to rebel against the increasing cost of the cable industry and their ways. So the question is, why would Netflix do such a move? Very simple- more profits.
When the cable industry started all it was, was a big antenna that had a cable that went to places where over-the-air signal didn't reach so people in mountains and rural regions could see channels they couldn't see before. TV channels were free and there was no cost for them; the cable company charged a fee for the service to the consumer and it was a done deal. But of course it couldn't end there, there had to be ways to charge more money, to make more money off the consumer, after all that is what business is about. So things started to change, more commercials started to come out, TV stations started doing contracts with the cable company and well the industry that we have today was born. It all started with providing an easy service for the consumer.
When we look at Netflix, everything started with making something easy for the consumer, the rental of DVD's to the comfort of your home. You would click here and there and a few days later you had a DVD at your door step. Later Netflix discovered that if they could upload some content online to stream they could save some money, and also get more consumers. Later they decided to try to make their DVD rental business as small as possible and they revamped the pricing. They moved to a streaming only service, to a more convenient thing. Before the streaming service was included in your DVD rental subscription, they then made a stream only package for those customers that only wanted to stream. And with that the streaming service of Netflix we know today was born.
As of December 31st, 2014 Netflix had a little over 5 million DVD subscribers, compared to their 35 millions streaming subscribers. So the question is what goes from here? Well the Cable industry had the same question in the 1950's. You see like any other business, Netflix will want to find more ways to get more money, they know that increasing the cost of the subscription is a way, another way is also to add Ads to their already placed TV shows and movies. Netflix is a business like any other, and yes they want more and more subscribers from the cable TV industry. But let's not forget business evolve and with the evolution of a business we can see Netflix become the new Cable TV industry, and turn into Online TV industry.