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People are freaking out about ads coming to Netflix

Netflix Australia Orange is the new Black
By John McDuling
Published Last updated This article is more than 2 years old.

Reed Hastings, the CEO of Netflix, has always taken an unwavering stand against advertising on the streaming video site.

“We have no plans to go towards advertising-based models,” Hastings said back in January 2014. ”Our brand—at least over the next couple of years and at this point—really stands for that commercial-free experience that we have, where the consumer is in control of the experience… So it’s fundamental to that control orientation that we don’t cram advertisements down people’s throats.”

Now, a year and a half later, Netflix is experimenting with advertisements, according to various news outlets and scandalized people on the internet. Outrageous!

In reality, it’s not as bad as it sounds. Some Netflix users have been forced to sit through short promos for the service’s own original content, inserted at the start or end of other shows they’ve watched. “We are experimenting with pre-rolls teasers for our original shows, just like we have been doing with post-roll for awhile,” Jonathan Friedland, Netflix’s head of communications tells Quartz via email. But essentially, he said, Netflix’s no-ads policy “remains unchanged.” 

It seems a bit silly to get too worked up about this. After all, the premium cable and streaming video channel HBO, Netflix’s feted rival, also makes a big deal out of being advertisement-free, and it does a similar thing before its shows. It also makes sense for Netflix to push its own shows (it is already advertising them heavily on broadcast and cable TV), which are increasingly becoming the main reason to subscribe to the service.

As for how long the self-imposed ban on third-party advertising will last, that’s anyone’s guess. Netflix is generating relatively modest profits at the moment, but its expects its profitability to increase substantially in 2017 once its global expansion is complete. And it’s not facing pressure from investors to ramp up profits in the short term anyway. The streaming video giant is the best performing stock on the S&P 500 this year, rising by more than 82%.

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