A New Way to Monetize Streaming
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Imagine if streaming companies were the new face of retail. With physical retail stores disappearing, more and more shopping is done online. What if online shopping took a step further and then shopping took place while watching Ozark or Star Wars the Clone Wars?
Although the idea of “shoppable TV” has been around since at least the 1980s, we now not only have the technology to make it both possible and pleasurable but we also have the larger economic and societal circumstances that can allow it to be more than a niche activity.
Now you might be thinking that they’ll be adding ads on their content to make it “shoppable" and that disrupts the experience. Well, imagine if the ads weren’t there.
If you think about it, Netflix, Disney, and other brands have tied brands and entertainment for years. Look at Amazon. By combining Prime Day with the Amazon brand, Amazon has a day where they achieve massive sales. And you have other small experiments built around traditional models of brand awareness and product promotion.
Consider instead what would be possible if these brands connected the data they have from the production process all the way through to distribution and audience targeting. Imagine if Netflix took all the costume and time-code data that it has for every one of its original productions and connected it with shopping functionality. A viewer could find out precisely what the person on screen was wearing or what types of pans were used in a scene.
When they see the thing they interest them, they can click on it and buy it. Using a phone as a second screen, this type of shopping wouldn’t even have to pause the program if other people were also watching. TopShop was one of the pioneers of the shoppable live-stream.
With full control of the production pipeline, streaming brands are well-placed to advance this type of technology. For Amazon, making partnerships like the one with Vogue can allow them to monetize Prime Video further. Netflix has been experimenting with the “choose your adventure” feature on its content and to monetize it, Netflix advertised a certain cereal brand to its viewer based on their demographic or past purchase behavior.
A version of the technology for shoppable TV is already being tested and rolled out by NBCUniversal, which happens to be launching its own streaming network Peacock in the near term. Also, Youtube is looking into shoppable ads as well.
Some people have doubts about shoppable ads being effective. Well, interestingly they've been proven to be effective. On Pinterest, pins are shoppable and when advertised, they become a shoppable ad (technically speaking).
So overall, streaming companies might be at the center of a new paradigm shift in advertising. With product placement becoming the new big thing, expect streaming companies to receive a lot of ad revenue especially for Netflix.
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