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The latest trends and insights from our team.
branding
4 August 2021

netflix is an advertising powerhouse.

Have you watched The Queen's Gambit on Netflix? Released late 2020; to date, it is Netflix's most-watched scripted limited series. But we are not here to talk about that.

What is interesting is that since its release on Netflix, chess is cool again. While chess retailers and app makers reap the rewards, other brands are surely taking note of the streaming service’s ability to singlehandedly drive sales.

According to the NPD market research company, sales for the ancient board game are up 125% since the miniseries debuted. One toy company, Goliath Games, told NPR that sales of its chess sets had increased more than 1 000% compared to the same period last year. Downloads for the Chess.com iPhone app have jumped from obscurity to the top of the charts.

When you think of Netflix, you don't think about an advertising agency, you think of them as the top streaming platform in the world. But the numbers we have just seen prove that there is more to this streaming service that meets the eye.

Netflix does not do 'traditional' advertising and have even gone on to say they will not introduce them – but are they taking less obvious advertising opportunities?

Netflix is ad-free, but it isn't brand free
In a New York Times article, writer Tiffany Hsu goes on to say. "Netflix charged the clothing company Diesel a licence fee to make outfits inspired by 'La Casa de Papel', one of Netflix's most popular shows. Online ads from Diesel hammered home the connection by showing the Netflix name, mentioning 'La Casa de Papel' and featuring characters in the distinctive red jumpsuits worn by the show's protagonists."

Netflix is "actively beefing up its marketing team," according to the research firm Forrester. "They're more flexible in the types of partnerships they can offer," said Ellie Bamford, an executive at the marketing agency R/GA.

The Diesel example, if it were any other advertising agency would be called an ad, yes it is experimental, but it is still an ad.

A new revenue stream in a saturated market
A Nielsen Study reported that 21% of people say they simply give up watching if they are not able to make up their minds on a streaming platform. In the streaming arena, with more and more platforms arriving like HBO Max and Disney Plus – having access to hundreds of shows and movies can make the decision-making process a lengthy one.

This could mark the beginning of Netflix moving their focus solely from content creation to branding partnerships as a revenue stream. With nearly 200 million global subscribers, Netflix has the opportunity to be an advertising powerhouse and command hefty fees should it allow brands a presence in or alongside its original series. Knowing this opportunity is out, advertisers are likely to keep trying to get Netflix to finally embrace them.
 
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