Ad Execs Say Netflix Will Have No Choice But to Run Ads

There’s mounting pressure from the ad industry for Netflix to fall in line with cable streaming services like CBS All Access, and offer an ad-based tier of service.

CNBC reported yesterday that at IAB’s Digital Content NewFronts convention in New York, ad execs were asked about whether Netflix could stay ad-free. CNBC reported JP Morgan Chase CMO Kristin Lemkau as saying that consumers would be open to ad-supported options if they understand the “value exchange”. They also quote Joshua Lowcock of ad agency UM as saying: “We grew up in digital, believing we should inject ads everywhere at every moment we could. And that’s why you’ve seen ad blockers and a move to ad-free environments. I think there will become a tipping point where ads come back. Netflix is ad-free now. I can’t imagine a world where Netflix will be ad-free forever. If you look at their content costs ... that’s where addressable advertising and new ad formats will come in.”

The CNBC piece specifically calls out Hulu and CBS All Access as examples of ad-supported platforms, saying: “Other streaming services offer both ad-supported and ad-free options. Hulu, for example, sells its ad-supported service for $5.99 per month. It costs $11.99 per month without ads. CBS All Access has similar offerings.”

Netflix did not respond to CNBC’s request for comments.

Alison Pitt