Several showrunners, creators, and writers have voiced their discontent with Netflix’s decision to insert mid-video advertising in their material, according to persons familiar with the situation, including Shonda Rhimes, the powerful producer behind “Bridgerton” and “Inventing Anna.”
The people, who requested not to be identified because the conversations are private, claimed that Rhimes and Trevor Macy and Mike Flanagan of Intrepid Pictures are among a number of creators who have informed Netflix officials they think the advertising interfere with their storyline. According to the sources, Netflix has informed producers that it will not be splitting any advertising money with them.
Not the first streaming service to offer an ad-supported tier is Netflix. However, it has made use of its prior dislike of ads as a marketing strategy to assist in securing deals with creators. In order to create material solely for Netflix, Rhimes agreed to a multiyear contract with the company in 2021. Reed Hastings, co-founder and co-CEO of Netflix, had made it a long-standing principle not to put advertising in its content when she signed the contract. Netflix and Rhimes both declined to comment.
This week, Netflix launched a less expensive, advertising-supported option in the US and other nations. As revenue and subscriber growth had levelled out in tandem with the conclusion of the global coronavirus pandemic, Netflix decided to launch an ad-supported tier. There are over 223 million Netflix subscribers worldwide.
According to those familiar with the situation, Netflix management have informed producers that they have purposefully positioned midroll advertisements at intervals that make sense with each episode’s plot. According to the sources, they’ve also advised creators that compared to subscribers who will pay for ad-free access, they don’t anticipate that many people will join up for the basic advertising tier.
According to Netflix operating head Greg Peters, “We’re leveraging our internal content tagging teams essentially to discover those natural breakpoints so that we can deliver the ad in the least intrusive moment.”
However, some creators haven’t been satisfied with the justifications. For Netflix, Intrepid Pictures creates horror movies and television shows. Because they prevent the development of tension, such are particularly poor matches for ad insertions. Five extended single-shot takes make up the 50-minute “The Haunting of Hill House” episode on Intrepid.
Sixth episode of the series, “Two Storms,” is now broken up by three commercial breaks, each lasting one minute and consisting of three adverts. People acquainted with the company’s thinking claim that Netflix’s complete lack of advertising was one of the primary factors in Intrepid’s decision to establish an exclusive contract with the streaming service in 2019. Intrepid’s spokesman declined to comment.
No revenue share
Not every artist has a problem with Netflix. According to a person acquainted with Ryan Murphy’s work, the three-act structure of his programmes makes it simple to add advertisements. Ryan Murphy inked a $300 million deal with Netflix in 2018. A person familiar with Scott Frank’s thinking claims that he has also not voiced any complaints about the co-author of “The Queen’s Gambit.”
For this piece, both the Writers Guild of America and the Directors Guild of America declined to comment.
It may be possible to appease irate producers who believe Netflix has changed the rules in the middle of the game by splitting revenue from advertising, particularly commercials that break the flow of the plot. But, in the opinion of some with knowledge of the situation, Netflix won’t be doing that. Because Netflix owns its original programming and has complete control over the placement of advertisements, authors have little recourse other than to complain.
However, other media and entertainment organisations have avoided the problem of intrusive advertisements or, in certain cases, agreed to split the profits. To avoid the problem of interfering with prestige programming, Warner Bros. Discovery’s HBO Max chose not to incorporate midroll advertising in HBO programmes.
Creators have had the opportunity to take part in income sharing when HBO has sold shows to linear cable networks in syndication, such as when “The Sopranos” aired on A&E. A representative for HBO declined to comment.
According to a person familiar with Disney’s policy, some creators who have produced material specifically for Disney+ may also be eligible to take part in advertising revenue sharing, depending on the terms of their contracts. Disney, on the other hand, is the owner of linear cable networks that may ultimately air Disney+ programming with advertisements, unlike Netflix. A representative for Disney declined to comment.