As The Wall Street Journal recently pointed out, the streamer has made some concessions. Notably, viewers of ABC’s How to Get Away With Murder will now see a promotional image of star Viola Davis, followed by ABC’s logo and the show’s title, prior to the opening credits. It only takes about five seconds, but it’s a significant addition for a streamer that has been notoriously ad-adverse.
Networks are clearly pushing to enhance their exposure on the streaming service, as WSJ points out — whether that be through pre-roll or other branding — and they do have bargaining power. As successful as Netflix is and as much as it has been ramping up its production of original content, subscribers want variety. If popular shows like How to Get Away With Murder don’t end up on Netflix, there’s the risk that its competitors may end up with them instead. As such, the streamer does have to make certain concessions, as it did with its deal with Disney/ABC TV Group.
“Netflix is a valued distributor that now provides robust cross-promotional opportunities for our networks and our series,” a Disney/ABC TV Group spokesman told WSJ. “It’s a win-win for both sides.”
It’s still unclear what other cross-promotional opportunities, if any, Netflix will allow, but another current example is the use of certain network logos on the home page’s show title cards. Previously, only cards for Netflix original series displayed this type of branding, much to the frustration of networks. Certain media companies have since successfully negotiated their addition, and a quick look at the site today shows logos from ABC, PBS, HGTV, FXX, and more.
To this point, Netflix has remained staunchly opposed to running 10-second time-and-day promos, according to a WSJ source. However, as traditional media companies continue to evaluate how to best interact with streaming services, there is the risk that the current model could be disrupted. As with the Disney deal, the company may have to find new ways to appeal to both viewers and networks alike.
One threat on the horizon for Netflix is the possibility that Time Warner may buy a stake in rival streamer Hulu, according to WSJ sources. The deal would reportedly allow Hulu to license the media company’s content, which potentially would include coveted shows from subsidiary HBO. Even though no agreement is currently in place, TheStreet reports that Netflix has already seen its stock fall by over 4.5 percent.
Whether or not the Time Warner-Hulu deal goes through, it’s clear that media companies are dissatisfied with how streaming has affected their business and are looking to leverage it in a way that will impact them in a more desirable way. Unfortunately for Netflix subscribers, this may mean that ad-free streaming could one day become a thing of the past.
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