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article imageNetflix cuts out 6 days of commercials per year versus cable TV

By Business Insider     May 10, 2016 in Business
Netflix’s refusal to show ads is a core part of its identity.
The company has always maintained that killing ads provides a better experience for its subscribers, and shows no signs of changing that position. And that stance has had an effect.
“We know one of the benefits of an ecosystem like Netflix is its lack of advertising,” Howard Shimmel, a chief research officer at Time Warner, told Bloomberg last year. “Consumers are being trained there are places they can go to avoid ads.” Once you get used to having no ads, the ones that still exist can become more and more grating.
This had led some networks to actually cut back the amount of ads they show, to lure back the younger Netflix generation.
But exactly how many ads do people avoid by watching Netflix instead of TV?
Streaming data site Cordcutting.com recently crunched the numbers, and it turns out that each Netflix subscriber saves themselves about 160 hours of commercials per year.
Here’s how they figured it out:
-First, they took Netflix’s recent 75 million subscriber mark.
-Then, they combined that with a quote from CEO Reed Hastings that said subscribers stream 125 million hours every day.
-That means every subscriber streams about 1 ⅔ hours per day.
-Then they looked at Nielsen data, which showed the typical hour of cable TV includes 15 minutes and 38 seconds of commercials.
-If you combine that with the Netflix subscriber data, you get that each subscriber avoids around 158.5 hours per year of commercials — if they were watching Netflix instead of cable TV.
One caveat is that, as Netflix CEO Reed Hastings has said on multiple occasions, Netflix isn’t just competing against cable — it’s competing against all forms of entertainment. So it’s unlikely that every hour a Netflix subscriber spends binge-watching would necessarily be spent watching cable in a non-Netflix world. And some cable subscribers use a DVR to cut out commercials.
But it’s still fascinating to consider how massive the scope of Netflix’s advertising would be if it followed cable’s traditional ad model.
This article was originally published on Business Insider. Copyright 2016.
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