Netflix Streaming Video Competitor – $100 CPM’s?
Via the always informative and interesting Searchblog by John Battelle, is this presentation given by Reed Hastings of Netflix. It outlines the usual growth, challenges, competitors, and so on but what stuck out to me was one slide on competition. It’s obvious that on the streaming side Netflix is going to be confronted with numerous competition from online (Hulu), cable/satellite, premium cable brands (HBO) and so on. What was interesting though was Netflix looking ahead at $100 CPM’s as potential competition. Here’s the text from the slide:
$100 CPM Threat
- Ad targeting on internet could get so good that free ad-supported movies and TV shows becomes nearly the entire market
- The better the targeting, the fewer ads needed to support a piece of content, thus the fewer people willing to pay for commercial-free Netflix
- Consumers don’t like ads in movies, but if there were only 4 ads, and the movie is free, that would be pretty compelling
- The threat depends on how much Google and others can improve personalized ad targeting for video
Anyone want to bet against Google on this? It’ll be interesting to see how their Android OS for the connected TV market changes the landscape as well.
The entire presentation is embedded below and definitely worth checking out.