Digital Gabe
Cutting Edge Commentary On All Things Media

Netflix Ad Sales?  (insert shudder here)

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I caught an interesting post on LinkedIn the other day (yes, you can still read LinkedIn for the articles 🙂 ), about a watershed moment that may be coming to the TV industry.  It started with a fairly innocuous note about the author’s friend being interviewed for a VP of Ad Sales position at Netflix.  Wait . . . reread that.  Netflix is hiring leadership to run an Ad Sales org?

To date Netflix’s entire business model has been subscription-based ad free viewership.  While they compete for eyeballs with the traditional TV and Cable networks, they’ve never gone into their ad sales kitchen.  If, in a hypothetical world, Netflix were to create a free(ish) ad supported tier, the traditional TV industry could be in for a major fight.

The obvious competitive advantage Netflix would bring to TV ad sales is scale backed by data.  Netflix has a complete set of first party data from its account registration process, and viewers must be logged in while watching.  In contrast, linear TV is still trying to solve for addressability by loosely linking viewers’ cable and cellular account data with who might be watching.  To date, the “addressable TV” formula still only covers about a quarter of the viewers in the US – a far cry from Netflix’s complete data set.

This data differentiator could become a major disrupter if Netflix does start selling ads.  I wonder how many TV sales execs out there are getting their CVs together right now?

 

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