What An Ad-Free Experience Means For Streaming Services


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Streaming As Entertainment

Streaming is at the forefront of the entertainment industry, especially with everyone being stuck at home due to the pandemic. With a huge selection of content and platforms to choose from, there hasn’t been a better time to be in the business of streaming.

With more and more viewers choosing platforms that allow them to escape the infamous commercial break, advertisers have to reformat their campaigns to get in front of the viewer without a commercial. In this blog, Hollywood Branded explains how streaming services work with advertisers on their terms, and how they choose to function.

What An Ad-Free Experience Means For Streaming Services-1

The Role That Advertising Plays In Your Streaming

Nobody likes having ads interrupt their show - that’s the whole reason you cut the cord and never looked back. With an increased prevalence of users heading towards streaming services as opposed to the “traditional” cable networks, advertisers have had to rethink their methods of reaching their desired target audiences. With platforms such as Netflix, Hulu, HBO, Disney+, and Amazon Prime, advertisers must jump through hoops when dealing with some streaming platforms, that may or may not rely on an advertisements as a steady source of income.

With the current surplus of streaming platforms and their individual reach associated, advertisers have an abundance of opportunities to reach the public in one way or another, or so many would think. Each streaming platform has their own values and their own views on ads as they relate to the consumer. Platforms like Hulu might welcome advertisements with open arms, whereas Netflix would reject most ad opportunities.

The Role That Advertising Plays In Your Streaming

Because of the general lack of “commercial breaks” that many were used to, ad agencies not only have to find alternative ways to reach audiences, but they also must now rely on the increased viewer segmentation associated with streaming platforms in order to directly target the desired viewers. With some ads even serving as part of the program itself, advertisers are beginning to follow the trend known as product placement.

In addition to the new directions of advertising that are becoming more prominent in entertainment today, we’ll also take a look at how some streaming platforms choose to adhere or stray away from some of the typical forms of advertisements and brand deals.

Dual Revenue Exposure - Hulu

We all pay that low subscription fee for services from Hulu, Disney+, Prime Video, and more. However, Hulu not only relies on revenue from the subscription fee paid by consumers, but they also receive compensation by allowing ads to run throughout their “lower-level” subscription packages. For those who want to lead an ad-free life, they have the option to upgrade their Hulu package to an ad-free experience. Additionally, they have partnerships with HBO (to provide access for specific programs and films) and their Parent Company, Disney+. Hulu also partnered with Spotify to provide student discounts, so if you have a student Spotify subscription you get Hulu and SHOWTIME included for no additional charge.

Though the ad experience on Hulu varies, there are a few constants- the ad breaks will be somewhere between 30 seconds to 90 seconds (much shorter than that of a cable commercial break) and the ads are almost always the same throughout the program. Additionally, if you are watching a movie on Hulu, chances are you won’t have an ad interrupting your program. Because of its chosen form of gathering funds from both the consumer and the advertiser, MediaPost reported that Hulu managed to garner nearly $700M in 2019 ad revenue and & 1.3B in subscriber revenue.

Keeping their financial bases covered with its dual revenue system, Hulu has established itself as a major player in the streaming world, and having Disney in its corner is a huge plus too. With the addition of Hulu original shows and movies, Hulu will likely remain a relevant and dominant force in the world of streaming.

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Cable Networks As Streaming Platforms - Peacock

It’s not news to anyone that streaming services are dominating the entertainment industry right now, however, some cable networks are choosing to keep up with the changes as they occur by adapting to the shift in how viewers interact and engage with content. NBC’s Peacock launched with a huge presence of NBCUniversal TV shows, movies, original series, live sports and so much more, according to BusinessInsider.

The most unique feature of this platform is not its vast choice in content, but its varied choices in packages offered from no cost up to $9.99 depending on the viewer’s preferences. Peacock offers a free base plan that is ad-supported, with up to 7,500 hours of content (again FOR FREE). Of course, you get what you pay for and in this case that translates to very limited streaming options. Nonetheless, this is definitely a first, considering most other streaming services offer free trials as opposed to free package plans.

Cable Networks As Streaming Platforms - Peacock

Moving up the ladder of plans offered you also have a $4.99 ad-supported plan and a premium $9.99 ad-free plan as well. Now many might ask why they have an option so “steep” compared to that of some other ad-free streaming services with “established credibility” but rest assured Peacock will keep you entertained! Featuring franchises such as Jurassic Park, Fast & Furious, and even ALL EIGHT movies of the Harry Potter series, the platform doesn’t seem like it plans on disappointing their viewers. Additionally, they’ve also acquired The hit NBC series, The Office, from Netflix in January 2021, forcing a massive fan-base to make a transition from Netflix to Peacock, that is if they want to continue streaming the show whenever they want…

Because Peacock is a service provided by NBCUniversal, a cable network, they managed to retain aspects of the network and allow for live coverage of sporting events such as the Olympics! Now even though they didn’t occur this past year, I think it’s safe to say that we can expect the event to occur this year, therefore NBCUniversal is really ensuring the same quality in programming, despite the evolution from the cable box that we all discarded.

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Advertisements Come In All Shapes - Netflix

Often referred to as “the largest streaming platform”, Netflix is known for its vast sea of content, from Netflix Original tv shows to documentaries on the deepest crevices of the ocean. Whatever you choose to watch on Netflix, one experience will remain the same no matter the viewer and that is a completely ad-free environment. Surviving on subscriptions alone could work in theory, but even with their 150+ million subscribers, Netflix remains about $12B in debt, as reported by TheNewYorkTimes.

Now just because they manage to work without commercial breaks and ads doesn’t mean that they don’t participate in some forms of product placement deals. If you watch some Netflix original content, you may notice some apparent references, appearances, and features from prominent and known products. We see examples of this in the, To All The Boys I’ve Loved Before, series where they feature subway products (subs and drinks). This partnership continued to the movie premiere where guests were given subways subs and necklaces that resembled a sub split in half. If you watch some other original series and movies you can spot other times where they mention slogans, or (sometimes) subtly promote products.

Advertisements Come In All Shapes - Netflix

Where Netflix differs from other streaming platforms and the common practice of product placement, is that they don’t exchange money in order to do it. According to Insider they do so for free. This method is important to them for a few reasons, one being that they remain authentic in their mission to stay ad-free, but also because this way, they may associate themselves with brands that they want to, and rely more so on word of mouth via social media promotion, social gatherings, and everyday conversation.

Not All Advertisements Appear On Screen - Apple TV+ & Disney+

Apple is one of the newest players to hit the streaming scene, but that doesn’t mean they didn’t come to play. Coming out the gate with A-Listers like; Jennifer Anniston, Steve Carrel, Reese Witherspoon, Oprah and so many more, they hit the ground running with their more than impressive Apple TV Original line-up of movies and tv shows.

While Apple TV+ is an ad-free platform, they market themselves by drawing you into the platform as well as their other products with exceptional deals. For students who pay for the student plan of Apple Music, you receive Apple TV+ completely free. You can also get access to the streaming service when you purchase a new Mac or iPad product as well. If you don’t get the service for free, it’s also offered at the low price of $4.99 a month, which includes access to all Apple TV+ Originals, and you may rent any other movie or tv show using their extensive iTunes database.

Apple TV is unique in this matter because they, similar to that of Amazon Prime, advertise themselves and their products and capabilities more than that of the products of external advertisers. What separates them from that of Amazon Prime however is that they still allow you to access Platforms like HBO, CBS (discounted), Showtime, Epix, BET+, and many more channels with corresponding free trials. In that aspect, I’d say that Apple TV+ is trying to replicate the large reach that we see only with the competitor, Disney+.

Disney+ had managed to accrue a huge following the moment they mentioned their plan to create a streaming platform, and they did not fall short of our expectations. With their seamless app design, it’s easy to maneuver and it’s clear just how many bow down to the giant, Disney. Disney+ is another platform that doesn’t rely on ads, however like Apple TV+, their monthly price is lower than that of Netflix, and they are continuously adding to their collection with originals and older content. Not only that, but Disney+ also allows you to benefit from other plans of ESPN and Hulu if you upgrade your bundle, making sure that consumers get the best bang for their buck.

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Streaming In An Increasingly Digital World

As we continue to rely on new viewing platforms, it’s clear that once the cord has been cut, there is no going back. With more streaming platforms making their appearances in your app stores, the question is which one provides the best content curated towards you? That being said, most people manage to benefit from multiple streaming services at once, and ad agencies will as a result continue to market their products towards their intended audiences and viewers will continue to search for ways and premium plans that frees them from that trap. Which leaves the question for the viewer, which one provides the best content curated towards you?

With services like Peacock taking their programs off of those such as Netflix, we will likely see a shift in content. One that probably includes more Netflix originals. As many more Networks begin to make the jump to streaming, they will most likely want their shows and movies back and a part of the lineup. So will Netflix and Hulu begin to offer more original content? Will that be what makes them special? What will draw in new audiences? Or will they lack nostalgia that the platforms were once able to bring, start to push viewers to move back to the Networks they thought they had escaped? I guess only time will tell.

If you’d like to read more on streaming services and their marketing strategies, check out some of our other blogs!

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