By Alex Spencer
Subscription-based video streaming service Netflix has begun to show pre-roll video ads on some of its programming.
According to Cord Cutters News, the ads have started rolling out to the Xbox One and DVR devices like Tivo and Roku. The format of the ads currently vary – ranging in length from 20 seconds upwards and in some cases including a ‘skip’ button – but they all have one thing in common: they’re exclusively advertising Netflix Original shows such as Orange is the New Black and Daredevil.
A Netflix statement to Cord Cutters News claims that, for now, this is firmly a trial – and according to CEO and co-founder Reed Hastings, they’re not really ads at all:
“No advertising coming onto Netflix. Period,” Hastings wrote on his Facebook page. “Just adding relevant cool trailers for other Netflix content you are likely to love.”
It seems, then, that the ads aren’t intended to draw in extra revenue in order to boost the company’s relatively narrow profit margins. In Q1, despite hitting a record 60m subscribers, Netflix posted profits of $23m (£15m), less than half of what it made a year earlier, leading to speculation that it needed to find another source of revenue.
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Source:: Mobile App News