Is Netflix Sure it Wants to be an Advertising Company?

Also, the media business is a Betch

Since she was hired, Jeremi Gorman had been on tour.

The former Netflix ad chief did CES. She did the Variety Summit. She did Possible and Cannes. She was out there telling the story - Netflix was being cautious about its advertising product, wanting to get the basic stuff right. Subscribers were growing at a nice clip. Brands loved the chance to be part of the ‘zeitgeist’ driven by hits like Wednesday.

And 13 months later - less than a year after the ad supported version of Netflix actually went live - Gorman is out.

She’s being replaced by Amy Reinhard, who had previously been Netflix’s vp of studio operations, and that was after helping to oversee content acquisition. Clearly she’s not an ad person.

Which begs the question - is Netflix really an ad company?

Maybe Gorman just didn’t click at Netflix. Maybe she was seen as redundant with vp of global ads sales Peter Naylor. Maybe the bosses just wanted one of their own taking more of a direct hand in the growth of this product.

The thing is, you typically you don’t bounce someone in that prominent of a role because things are going well. I don’t know Reinhard at all, and Netflix doesn’t seem to hire a lot of dumb people. But it seems to say something when a media company - which has long thought of itself as a tech company - puts a non-ad person in charge of the ad business. Especially when that company was so absolutely adamant about never wanting anything to do with advertising for years, until things changed.

Insider reported that Gorman had faced “a lot of internal resistance to change." Garrett Sloane of Ad Age’s post mortem on the Netflix move paints a picture of a company that doesn’t know what it wants.

Which begs the question, will an insider be even more reluctant to push the ad business to where it needs to go to become viable?

Netflix has hired an army of ad sales people over the past year, so they’ve got the boots on the ground to grow the business. But there has to be a big business to sell. Brands were ok putting up with $60 CPMs and limited inventory early on to be part of Netflix’s advertising coming out party. Now they want CTV ad scale - which they can get from YouTube and Hulu even the Paramounts of the world. Have you ever seen Netflix promote its ad-supported offering in a big way?

The bigger question - Is Netflix going to do what it needs to do to keep building its ad business? Probably, but I’m less certain about that than I was a few days ago.

---

I had a really fun conversation this week with Kate Ward, Chief Creative Officer at Betches Media on my Next in Media podcast.

I was asking Ward about why Betches wasn’t going through the pain that so many other digital native publishers had over the last few years (BuzzFeed, etc.)

Certainly, as Ward pointed out, it suddenly helps to have not taken loads of venture capital funding that you need to pay off. The bigger asset Betches claims is real audinece connection, which stems largely from its creator-driven roots.

“People don't really have the same affection for brands the way they have for like, let's say creators, but we've been able to stick out amongst all of them because, you know, we do have creators in house,” Ward said. “We are ourselves creators. And we put up forth a very genuine experience that people feel very connected with.”

Clearly, that type of connection was missing from many a digital publisher that just chased social media sharing in the mid 2010s. The same could be said about anyone seeking TikTok virality.

“When a lot of companies are working off of just algorithms and everything, when things change, they suddenly lose their audience,” Ward said. “Whereas like we have an audience that actually is following us. They are not just accidentally falling on our content, right? Like they are, they're going out of their way to find us. And so those platform changes, you know, don't affect us quite as much because people will seek us out no matter where we are. And that's not something that every other media company can say for what they're producing.”

My question is, post writers-strike, can all traditional media companies say this? Many of the shows the TV networks have thrown on this fall feel like the kind of filler you just stumble upon (“Name that Tune.”) Perhaps it’s unfair to just programmers during such desperate times.

But I still wonder whether the TV industry can and should try to borrow from the creator economy, and find a way to tap into that ‘seeking you out no matter what’ quality. How exactly - I’m not sure. Matthew Belloni and Taylor Lorenz had a smart conversation about this on The Town podcast this week, during which they discuss Lorenz new book Extremely Online.

The title of the episode is “Influencers Don’t Need Hollywood Anymore.” True, but does Hollywood need them?

“I think it’s all going to get more more blended,” said Lorenz. “I think the internet is becoming the default reality for everything. I think Hollywood is recognizing the power of the internet more and more.”