Alex Spurzem.
By Alex Spurzem, Managing Director, Samsung Ads Southeast Asia and Oceania (SEAO)
Once upon a time, TV advertising was the go-to for getting brands in front of mass audiences, while streaming focused on chasing subscribers.
There’s no doubt streaming giants like Netflix have made a once-in-a-generation impact on the Australian TV landscape since launching a decade ago. They didn’t just popularise binge-watching—they pioneered it, redefining consumer behaviour in the process. However, now they are under immense pressure to become, and remain, profitable.
Ironically, it’s not the path ahead that’s paved in profitability for Netflix - but the path well-trodden.
Ad break back from the brink of extinction
The rapid rise of streaming once seemed like the end of the ad break, with Netflix CEO Reed Hastings famously ruling out ads. He also said sport wasn’t in the plan—but that’s a story for another time. An ad-free experience was a huge part of the appeal to consumers and one of the pivotal drivers behind surging subscriber numbers.
Fast forward ten years and nearly all the major streaming platforms, including Netflix, have completely U-turned. Not only have they adopted the traditional ad break for those who want to pay less, but the strategy actually holds the key to profitability. Netflix says it now has over 300 million ad-with-fee subscribers globally, and in December, just over half of new sign ups were for ad-supported subscriptions.
Foxtel stated that it introduced ads “to keep subscription fees low” suggesting a potential price-rise without them. Amazon Prime followed suit with a default ad-tier, prompting consumers to opt in and pay more for an ad-free experience. Two very different approaches to creating a new lower price bracket entirely. Many viewers appreciate the savings of ad-funded tiers, but streamers must tread carefully to keep their longtime subscribers on side while offering choices for all.
Streaming platforms are gaining momentum and investing heavily in the advertising ecosystem. The real test. How long will budget-conscious subscribers stick around? According to Kantar, almost half (48%) of subscribers are now more likely to switch between different services than before to save money while Samsung Ads US data shows that, for every active user on a streaming app, eight users churned last year.
From brand new to déjà view
Originals have been a big focus of Netflix’s content strategy for several years and, as of the middle of last year, it had the most original streaming content of any platform. But while Netflix continues to churn out award-winning original content, it recently announced it would license more older content to draw viewers and differentiate itself.
Similar to the resurrection of the ad-break, Netflix is fast returning to its 2016-era, where original shows - such as House of Cards - made up around just 5% of its library. Why? Aside from the obvious money-saving element, last year Netflix’s licensed broadcast series were outperforming its original content 71% to 29%, according to Parrot Analytics.
Forget the shiny new tent poles - when it comes to the most-watched shows of 2024, the real winners are the ones that have already stood the test of time. Across major streaming platforms, billions of hours were spent, not on the latest prestige drama, but on long-running favourites and nostalgia-fueled binges. From Bluey keeping parents sane, to The Big Bang Theory, NCIS, and Grey’s Anatomy proving their staying power, the data is clear: audiences crave familiarity.
Netflix is very unlikely to cease original productions all together but a popular middle-ground the platform is taking involves leveraging the huge subscriber base it's been building for two decades to cross promote original and licensed content. For example, in parallel to the release of Arnold Schwarzenegger’s Netflix Original, Fubar, the platform licensed multiple Arnie classics, including Terminator, Kindergarten Cop, and Conan the Barbarian.
The platform’s huge reach and powerful recommendation feature enables it to resurrect a show, re-engage a pre-existing global fan-following and turn it into a pop culture moment once again.
Streaming taking a leaf out of the linear playbook
In the fast-paced world of entertainment, it’s easy to be swept up by what’s new. But the reality is audiences love what they know. Old is gold. A walk down memory lane. Creature comforts. The list goes on. And the reason why Samsung TV Plus’ Throwback Channel is consistently amongst our most popular channels with shows like Dawon’s Creek and The Nanny raking in millions of viewing hours.
These lean-back shows pose a powerful commercial opportunity that the industry can sometimes be too tunnel-visioned to see. Buying premium ad-space and seeing a brand run alongside the newest sci-fi or drama is exciting, but data shows that targeting audiences when they are at their most immersed is not always the most effective strategy.
Just like Samsung TV Plus has been doing for many years with its FAST (free ad-supported streaming TV) offering, Netflix is now connecting with consumers via old-school fan-favourites. It is capturing audiences while they are relaxed, and open to branded messaging but with lower ad-loads than what they are used to on traditional TV.
And, as Netflix prepares to go full-stream ahead with live events in 2025, it looks like the behemoth will also be taking a few pages out of the FAST & linear playbook. For advertisers, this is a wake-up call - while the industry obsesses over the next big thing, massive opportunities lie in the shows people actually watch, again and again.
The future of TV has never had more in common with the past than it does right now.
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