Netflix shows commercials right now; they’re just commercials for other Netflix shows. I doubt they’ll start selling the post-roll space to third parties, though, as it’s evidently more profitable for them to use that space to keep you subscribing to the service than to make a few cents for an ad placement.
As for cable-style interstitial commercials, though, the only way I could see Netflix ever doing that is if the company were to enter a Blockbuster-level tailspin. It would be selling off the core Netflix experience just to stay afloat.
It bothers me how many people think I’m psychotic when I express this opinion. Frankly, I don’t care whose content they are promoting - SOMEONE please put a fucking price tag on a service that plays exactly the content I select AND NOTHING ELSE.
Stupid semantic arguments about whether it is an ad are not are completely irrelevant to the fact that I don’t want to see content I did not pick.
Hulu has literally half a dozen old shows that they are contractually required to show an ad in front of or take down entirely. The vast, vast majority of users on the service will never see one.
It's a very different scenario to a company actively looking to increase advertising.
Hulu does offer an ad-free tier, it's like double the cost of the basic plan. I haven't sprung for it yet, but I'm sorely tempted.
I can see Netflix looking to a similar model in the future. What are they at now, $12.99? I can see the current base subscription going to $14.99, while simultaneously launching an ad-supported version priced around $7.99.
Edit: Netflix actually DOES offer a cheaper $8.99 plan currently. This one is restricted to one screen at a time, and does not offer content in HD. So if they stuck ads on it, maybe they could bring the price down to like $5.99.
YouTube 30 second preroll ads cost currently around $ 7 per 1000 views and it's decreasing. So to take Netflix from $ 14.99 to $ 7.99 per month they would have to show you around 500 minutes of ads every month. That's 33 of those 30 seconds ads every day, without skipping a day. While you still pay $ 7.99 per month as well. I don't expect consumers will accept that.
So the only way they can make an ad-supported Netflix work is to create some form of much more effective ad (which usually means taking more of your data) or attract a very specific high value audience (makes them too much of a niche player for their size)
Premium video ads sell at much higher CPM than YouTube. Hulu makes more money from users on their "with-ads" tier than on the higher-priced "ad-free" tier.
They could mess around with the amount of ad time per program and the plan price.
I think Hulu is showing at least 5 minutes of ads per 22 minute program, so watching two hours of programming would exceed the ad time you mentioned. This is reasonable for a single day, but a high bar for a daily average.
I pay for the ad-free tier but I still get ads for their live streaming service (and for their DVR, every commercial break gets replaced with 3 minutes of non-fastforwardable commercial content), which is why I'm probably going to stop using their streaming service. I really only wanted it for sports channels anyway.
I think this must be show-dependent. I, too, pay for the ad-free tier, and the most ad-like thing I've seen is a 2- or 3-second Family Guy is returning on <date> and a FOX logo interstitial at the start of streaming an episode of Family Guy. Can't recall seeing anything else across a number of shows.
It seems to be network/show-dependent. The ad-free package removes all the ads that Hulu shows, but if Fox has ads of their own they're still in there. I usually get a single FX show promo in every Simpsons episode I watch.
I have no idea. Sports events tend to be hours long, and every commercial break has these. You can technically skip a few minutes ahead, but then you miss part of the game.
Advertising is a disease, it infects and corrupts everything it touches. Often it starts when a company realizes it's another revenue stream, and adds commercials to a product people already pay for. And when there are competitors, this lets a company undercut them.
Netflix has experimented with it. They do product placement still, but the show disjointed has plain commericals. They are a tad unusual for commercials, in that they share the theme of the show.
As for cable-style interstitial commercials, though, the only way I could see Netflix ever doing that is if the company were to enter a Blockbuster-level tailspin. It would be selling off the core Netflix experience just to stay afloat.