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What Netflix’s rise in subscriptions really means

Advertising / Interactive / Media / Misc Fun / Social Media / Technology

Why the rise of Netflix and other on-demand video services make product placement even more essential.

Netflix’s recent surpassing of 50 million subscribers (the equivalent of approximately 16% of the U.S. population) this week has us thinking. If this is going to be the next primary way to view programming, will traditional video ads still be as affective?

My belief is no. Of the many reasons why people abandon cable and opt for streaming, one of the key motives is the fact that streaming services offer less ads and more content. So if the market heads in the direction where video ads become limited the industry must take full advantage of an age-old strategy; product placement.

This strategy has been used extensively in Netflix’s original programming; most notably “House of Cards”; while on the other hand broadcasting companies have yet to place as high of an importance on this tactic. This will become a monumental advantage for Netflix as streaming becomes the norm. They will gain the ability to outbid such powerful broadcasters as Disney, Time Warner and NBCUniversal for advertising sponsorship due to their programming’s ability to spark more consumer interest in products/ services and promote more action.

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