The Future of TV? No More Commercials, Says Netflix Chief Product Officer

Neil Hunt Foresees Unbundling of Channels, Increased Personalization

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Netflix Chief Product Officer Neil Hunt predicted Monday that the future of TV will see the unbundling of cable packages, more personalization of content and an end to TV commercials as we know them.

"Linear TV is ripe for replacement," Mr. Hunt said, speaking at Internet Week New York. Mr. Hunt said traditional scheduled TV is limited by what he called the "tyranny of the grid," or the 21 hours of prime-time programming that get the most viewers. Anything that doesn't fit into that grid gets thrown out, he said.

In contrast, internet TV allows audiences to aggregate over time and space, and can afford to curate content that has smaller audiences at any one time.

Not being beholden to the grid also means Netflix can adopt new ways of storytelling. Netflix originals don't need to be 48 minutes long to fit into a prime-time schedule, and don't need to force cliffhangers that keep viewers in suspense for the next episode, because viewers can "binge" into the next episode right away.

"The stories you watch today are not your parents' TV, and stories kids watch in 2025 will blow your mind away," Mr. Hunt said.

In 10 years, Mr. Hunt expects entertainment will be more democratized because of increasing personalization.

Netflix is using its massive collection of consumer data to learn what users want to see and generate personalized recommendations for everyone. Mr. Hunt expects those technological capabilities to go further, eventually allowing Netflix will be able to make recommendations based on your mood, time of day and who is watching alongside you. But Mr. Hunt stressed that those types of personalization won't feel intrusive on viewers' privacy or even necessarily be visible to them.

All of this means that traditional channels will become irrelevant, he said, calling for channels for each individual person.

Mr. Hunt also predicted that the cable bundle will eventually break up, letting consumers select exactly which networks they want to pay for. That sounds great to many cable subscribers who don't like paying for channels they never watch, but cable companies and others have argued that a la carte cable would actually mean higher bills.

In a more personalized, unbundled world, advertising would also need to evolve. "Internet TV is divorced of the need of advertising revenue because we can develop direct relationships with the consumer," Mr. Hunt said, calling the subscription, ad-free model is very popular with consumers.

Marketers will "need to find a different place to advertise," Mr. Hunt said. While one of his predictions was "no more commercials," Mr. Hunt also pointed out that the same technology that lets Netflix personalize recommendations could also allow streaming services to select the right commercial for the right consumer. This would mean viewers see fewer, but more relevant ads, and marketers would be better able to target very specific consumers.

Netflix CEO Reed Hastings has said that the company has no plans to introduce commercials.

The TV set is also evolving. Mr. Hunt predicted 4K, which is above high-definition, will be ubiquitous in a year or two, and that everyone will have a smart TV by 2025.

When asked whether Netflix will ever break into live programming, like sports, Mr. Hunt said Netflix doesn't have a competitive advantage in this area and it isn't something it is currently focused on. But, he added, "never say never."

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