A New King Is Crowned
There is a new favored content creator and distributor in town! And one that is very similar to the previous leader. In a recent study by Morgan Stanley, Netflix is shown to have the “best” original content versus any other SVOD (Streaming Video On Demand) OR (and this is a biggie…) of any television premium subscription service. So this survey this doesn't take in account regular network TV distributors - but quite frankly... none would win anyway.
In this blog post Hollywood Branded takes a look at the survey and what makes Netflix THE choice for so many viewers - and why it's a phenomenal platform for product placement.
A Commonality Of Content
Netflix and HBO share a similarity that only a few other content platforms have. In fact, Starz and Showtime, and Amazon’s Prime are really the only other platforms that share it as well. And that commonality? They don’t allow brands to advertise. That means their model is not based on what an advertiser likes, only on content that drives viewers to subscribe and keep their subscriptions. This means the content we’ve seen over the years is often more thought provoking, jaw dropping or (gasp) just a little dirty. Because it engages viewers and keeps them watching.
And ratings don’t matter because advertisers don’t matter. So the content and platform can take risks that other platforms just don’t chance.
Product Placement Difference – HBO & Netflix
For years now, HBO has been considered the reigning champion of content creation. Think of shows like Entourage, Sex & The City, Hung and Ballers. These are all shows which made (are still make) major viewership numbers jump. The cable network is unique – unlike any of its competitors, it doesn’t take dollars for brand integration deals. And it rarely allows brands to co-brand around content. Netflix has taken a similar model, with one difference. Content creators who own the content Netflix purchases/licenses keep their rights to do any product placement deals they want. Similarly however to HBO, they too however don’t allow brands to co-promote content in any media.
The Survey Says...
2016 marks the first time in the historical 6 years of the survey to have Netflix win. And HBO lose. Approximately 29% of respondents said Netflix was best in original programming (last year 23%), with HBO at second place with 18% (versus 31% last year.) Amazon, Hulu and Showtime each ranged from 4 to 5%, and Starz came in at 2%.
The Future Of Content Spending
Now we all know House of Cards is one of the most talked about series on the SVOD network. But that series was only the start. Now there are dozens of productions which have been created in partnership by Netflix – including Marvel’s Daredevil and Jessica Jones series, Orange is the New Black and even continuations of other cancelled series like Longmire and The Killing. Last year the network stated they would spend $1 billion in developing new content – this based on the fact that subscribers have stated they prefer the original content over the previous model of syndicated content that Netflix employed. All monies raised straight from subscription viewership jumps.
Morgan Stanley, however, expects that Netflix will spend even more than HBO on original programming in 2016 – reaching numbers close to or higher than $2.5 billion. And that is likely to seal the deal in the favor of Neflix for the 7th year of the survey. Time Warner’s HBO is projected to spend $1.8 billion, and CBS’s Showtime $700 million.
Parks Associates recently estimated that 52% of U.S. broadband homes take Netflix–almost half of what Amazon Prime has managed, and 14% for Hulu.
And Netflix is only set to continue to grow. They are now in over 190 global territories, and have content in 20 languages.
What This Means for Brands
Advertisers should take notice - and start looking at product placement opportunities on Netflix with an even keener eye. Especially as premium cable subscribers keep on threatening to cut the cord, and cancel subscriptions. With the network reaching over 55 countries, brands truly have an unparalled gateway to viewers around the world on content that is more than just 'good.'
Is Product Placement right for your brand? Watch this video to learn more about how this marketing practice works, what brand categories it works for, and the results brand marketers see!