We all know the frustration of an ad popping up in the middle of our favourite song on Spotify or the 30second unskippable nightmares on youtube before our favourite video. As if that wasn’t enough, we have ads on the various  OTT platforms in the beginning and middle of various shows, completely ruining our weekend binging plans. But one platform that is absolutely advertisement-free is NETFLIX. But if that’s the case, how does Netflix sustain and earn revenue? Let’s find out. 

Netflix remains to be the market leader amongst the various OTT platforms along with Amazon Prime Video. While Amazon Prime Video does resort to commercials on its platform, Netflix, from the very beginning, has refused to integrate ads into its business model. 

But that does not mean that Netflix does not collaborate and partner with brands for marketing. With a massive reach amongst the youth, Netflix is one of the most sought platforms for companies to market their products to Gen Z & Millennials. 

Netflix’s theory is to stay in it for the long run and create higher viewer satisfaction which is what will ultimately keep them ahead in the game. This brings us to the conclusion that Netflix may be ad-free but it's not brand-free. 

Netflix’s marketing team believes in flexible partnerships that do not consist of ad revenue. 

For example, Netflix charged a license fee to the apparel brand ‘Diesel’ in order to make outfits inspired by the recent Netflix sensation ‘La Casa de Papel’, commonly known as ‘ Money Heist’. Diesel displayed ads mentioning Netflix’s name and such endorsements Netflix receives for free. 

Similarly, on the release of its most famous original, ‘ Stranger Things’, Netflix struck deals with around 75 companies. For instance, it teamed up with Baskin Robbins on new ice cream flavours named after the show’s characters. Netflix took a licensing fee for a “Stranger Things” promotion in London designed by the immersive-theater company Secret Cinema, which recreated a mall from the series that sold special cosmetics from Mac and products from Coach. 

On other occasions, Netflix has partnered with brands like Sephora and NYX to launch series-specific cosmetics products and these products were sold out as soon as they hit the market, being a clear indication of how well connected Netflix is to its audience. 

As for product placements in various shows, the producers take a call and showcase products in their series that add to the authenticity of the show/scene. Such product placements are rarely paid for. 

On a concluding note, we can say, Netflix is definitely one of the most customer-oriented OTT platforms that give ‘customer satisfaction’ the utmost priority. It remains to be an ad-free streaming service but the day it opens its doors to such partnerships, companies would be lined up to place their brands and products on this platform that holds a large share of the most attractive audience base.