Netflix is approaching radio as a marketing experiment rather than a new revenue stream
Netflix is readying the January launch of its 24-hour comedy channel on satellite radio station SiriusXM. Little is known of the strategy behind its first foray into radio, but the company’s chief executive has said it’s approaching the experiment as a marketing play rather than a new revenue stream.
Netflix announced earlier this year that it would partner with SiriusXM – which recently acquired Pandora in a $3.5bn deal – for an exclusive channel dubbed ‘Netflix is a Joke’. It would run short snippets from its lineup of stand-up specials from comedians including Chris Rock, Amy Schumer and Jerry Seinfeld, as well as programming from Netflix’s comedic talk shows like the ‘Norm Macdonald Has a Show’ and ‘My Next Guest Needs No Introduction with David Letterman’.
Speaking on an analysts call for its third-quarter result, Netflix’s chief content officer Ted Sarandos described the SiriusXM deal as a “marketing synergy for a stand-up comedy initiative”.
“It's a small test right now to see how that goes – putting up clips, interviews and interview shows featuring our talent and supporting our talent," he said. "Think about it as a different way of marketing – when you're not on Netflix, you're more likely [to be] in your car.”
Chief executive Reed Hastings added that the company is “not really focused on the monetization of those efforts” yet.
“It's really around deepening the brand connection,” he said. “All of our auxiliary efforts are not around creating additional profit streams for now, they're really aimed around strengthening these mega titles because that's what drives the business. And a little bit incremental growth is much more profitable for us than creating separate businesses.
"So, we're always evaluating them on, do they help the core? Did they help that love of the new stand-ups?”
The company stated that streaming revenue increased 36% year-over-year and global membership surpassed 130 million paid and 137 million total.
The figures came following a significant investment into marketing activity. Earlier this year, Netflix said it would spend more than $10bn on content and marketing, with the latter taking a $2bn slice.
Much of this investment was made in the second quarter (a 90% increase year-on-year), with ad spend slowing in the third.
Netflix stressed that the slowdown in spend was “timing related”, rather than a change in strategy, and the fourth quarter will see an increase.