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  Netflix

Commercial Gains: If Netflix moved into advertising

Earlier in 2015, Netflix launched pre-roll trailers for other content showing on its service, prompting widespread speculation that it planned on moving into provisioning advertising. Netflix has denied it is making imminent moves into advertising-funded video. Nonetheless, much of Netflix’s current growth is predicated upon subscriber growth - both ongoing domestic subscription expansion plus new international market rollout. Its year-on-year revenue growth has been running at roughly 15% for the past two years, but Ampere anticipates that this will begin to slow as it reaches saturation in some of its core territories.

As its growth begins to slow, Netflix will come under pressure to look for alternative revenue sources – be they additional subscription tiers or new models such as advertising. Ampere has created a series of scenarios, which it presented at the Future TV Advertising Forum 2015, to explore scenarios for if Netflix took the decision to move into selling advertising inventory.