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What to Expect from The Peacock Streaming Service

Despite taking its name from one of the flashiest animals on the planet, NBCUniversal’s Peacock streaming service is at risk of blending in with the flock.

Unveiled on Thursday at Rockefeller Center, where a 15,000-pound bird constructed for the occasion from shrubbery and lights towers over Midtown tourists, Peacock was the latest major streaming service to announce its debut in recent months.

When it goes live in April, it will have a deep library of content and a smattering of originals. So what will distinguish Peacock from Amazon Prime Video, Apple TV Plus, Disney Plus, Hulu and Netflix, other than its affinity for avian references on Twitter?

Its hefty bet on advertising.

On Thursday, at the studio where “Saturday Night Live” is filmed, NBCUniversal laid out a plan that relies on commercials, rather than subscribers, to generate much of its revenue.

The so-called Peacock Free option, one of three tiers that will be made available, will allow viewers to watch current seasons of NBC shows, series from the past, movies, news programming, Spanish-language content and sports coverage, including portions of one of NBC’s most elaborate productions, the 2020 Summer Olympics and Paralympic Games in Tokyo.

In exchange for paying nothing, Peacock Free viewers will sit through commercials from State Farm, Target, Unilever and other brands, making Peacock more akin to YouTube than Netflix. NBCUniversal executives hope the reliance on ads will give them an advantage over the streaming services from The Walt Disney Company, Apple, AT&T and other media giants.

Peacock will go live on April 15 for certain Comcast customers, expanding nationwide on July 15, nine days before the 2020 Games. NBCUniversal plans to spend hundreds of millions of dollars to market the streaming platform, which it expects to rack up between 30 million and 35 million accounts by 2024.

Peacock has nailed down exclusive streaming rights to shows like “The Office” and “Parks and Recreation” while also lining up reboots of “Saved by the Bell” and “Battlestar Galactica.” A series based on the true crime podcast “Dr. Death,” featuring the actors Jamie Dornan and Alec Baldwin, is coming, as is an adaptation of “Brave New World,” with Demi Moore. The “Law and Order” shows will be on tap, as will the Paramount Network hit “Yellowstone.”

Peacock will also try to attract viewers through a licensing deal with Lionsgate, known for films like the “John Wick” action series, and the NBCUniversal company Telemundo will provide 3,000 hours of Spanish-language original programming. The platform will be the only streaming service with new films from Universal.

But Peacock’s pride is its sprawling library — more than 600 movies and 400 series — which it hopes will draw more advertising dollars.

“Peacock is unique because of its advertiser model,” said Dan Ives, an analyst with Wedbush Securities, mentioning the “massive moat of content” available through the platform. “This could be a watershed event in terms of starting to monetize advertising in the streaming world.”

In addition to the free option, Peacock will offer a premium level with double the content: more than 15,000 hours of original programs, hit shows, current series and sports. Subscribers will have early access to evening shows like “The Tonight Show starring Jimmy Fallon” and “Late Night with Seth Meyers.”

Peacock will also offer a comedy special and an interview series from Kevin Hart’s Laugh Out Loud company, a show about a washed-up band called “Girls5Eva” from Tina Fey, new animated episodes of “Curious George” and “Where’s Waldo,” live coverage from the 2020 Olympics, and Premier League matches.

Viewers who subscribe to the cable giants Cox or Comcast, which owns NBCUniversal, will get free access to the extra content, while other viewers will pay $4.99. For $9.99 a month, or $5 for subscribers, Peacock viewers can upgrade to an ad-free version of the service.

Other streaming services, like the Disney-owned company Hulu, offer discount plans that come with ads, and the still-gestating short-form video app Quibi, set to start streaming April 6, will also go the ad route.

Comcast does not expect Peacock to be profitable in its first five years, executives have said. The cable company, which has 21.4 million video subscribers and 28.2 million broadband subscribers, plans to inject $2 billion into Peacock over its first two years.

Peacock will have various advertising formats, including ads that only show up when viewers hit pause and ads designed to appear during bingeing sessions. Peacock viewers will encounter five minutes of ads per hour or less, according to NBCUniversal, which is also capping the number of times an ad can appear to the same audience. The company said that it will use customer data from Comcast set-top boxes, advertising partners and its own collection to deliver relevant ads.

The platform will become a repository for shows like “Saturday Night Live” and “The Tonight Show,” content often found on YouTube that NBCUniversal would prefer to bring more securely into the fold.

But some of Peacock’s most anticipated content will not be available for months. “The Office,” the enduring sitcom that NBCUniversal wrested from Netflix last year in a $500 million deal, will continue to stream on Netflix until it moves to Peacock in 2021.

Last year, NBC snapped CBS’s 18-year winning streak when it topped viewership rankings during the November ratings sweeps period, which helps determine advertising rates. But some analysts have expressed concerns that NBCUniversal may be cannibalizing itself to support Peacock, forgoing licensing arrangements and other revenue-generating deals for popular titles like “The Office” in order to provide exclusive streaming content to its customers. By offering early peeks at late-night shows, NBCUniversal may offend station affiliates and cable operators that pay to carry those broadcasts.

“Getting in the game with Peacock is the right way to preserve an audience, but it will be very, very expensive,” said Peter Supino, an analyst at Sanford Bernstein.

Peacock went through a choppy development process, with a shake-up in its leadership team less than a month after the service was announced in September. Last month, NBCUniversal’s chief executive, Stephen B. Burke, said that he will step down when his contract expires after the 2020 Olympics.

The platform faces intense pressure from competitors like Disney, which blazed out of the gate in November with Disney Plus. Consumers are battling streaming fatigue, with multiple studies concluding that viewers are only willing to pay for a handful of services.

“There’s a battle for market share, and they’re going to have to fight tooth and nail for consumer eyeballs,” Mr. Ives said. “Timing and pricing are key.”

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Saudi Arabia Wants Your Next Vacation

AL-UYAYNAH, Saudi Arabia — In a makeshift camp under a starry sky, Ghazi Al-Anazi talked about his experience in the fledgling Saudi tourist business. A decade ago, barely in his 20s, he started taking British business associates of his brother to see the wind-carved hills of the Saudi desert.

Now 31, he has a small fleet of S.U.V.s, nearly a dozen employees and a self-taught ability to cater to the whims of visitors from many nations.

“I know what they want to do, and what I need to do about it,” he said, ladling out a dinner of barbecued chicken and Middle Eastern salads to a couple of dozen tourists from France, Ukraine, Malaysia and the United States.

Mr. Al-Anazi and his business, Ghazi Tours, take up to 900 visitors a month on treks like this one to a dry riverbed dotted with venerable acacia trees north of Riyadh, the Saudi capital.

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Credit…Stanley Reed/The New York Times

But he’s confident those numbers are about to multiply, as Saudi Arabia begins to open itself up as a major tourist destination. The government recently began issuing tourist visas for the first time, a remarkable shift for a traditionally shuttered society.

And it goes far beyond that: Billions of dollars are being poured into vast tourism projects throughout the kingdom, from flashy resorts to new airports, in a bid to shift the economy away from its dependence on the petroleum industry and the government jobs it finances.

Visiting Saudi Arabia has long been a difficult proposition for everyone except Muslim pilgrims going on the hajj and business travelers. For decades, historic sites have been largely ignored, and hotels and travel services were scarce outside major cities.

Unemployment among Saudi nationals is stubbornly high, about 12 percent. But the government figures that the travel industry, which employs about 600,000 people, can be expanded to create up to a million more jobs, as the need for everything from drivers, chefs and guides to hotel managers and archaeologists expands.

The move toward tourism was devised by Crown Prince Mohammed bin Salman, the kingdom’s 34-year-old chief policymaker, whose Vision 2030 program seeks to diversify the economy, draw in more outside investment and expand of the private sector.

The Saudis are hiring international real estate executives and introducing elaborate advertising campaigns to try to put themselves on the map. Already, there are signs the push is paying off: Saudi hotel room sales in the first nine months of 2019 increased 11.8 percent from the same period last year.

But a question hanging over the whole initiative, some travel experts say, is how many people will want to visit an ultraconservative kingdom that’s the subject of intense criticism over its treatment of dissenters and women, that restricts the use of alcohol and until recently barred unmarried couples from sharing rooms.

An effort to overcome those concerns by inviting social media influencers for expense-paid trips this year prompted a backlash by online commenters.

Saudi Arabia is promoting a different image: ultramodern resorts, ruins from ancient civilizations and romantic desert landscapes once crossed by Lawrence of Arabia. And tour guides won’t object if you want to take a selfie with a camel.

Referring the vast golden vistas, “I call it the new yellow oil,” said Amr Al Madani, the chief executive of the Royal Commission for Al-Ula, a region in the northwest part of the kingdom that is roughly the size of New Jersey.

Al-Ula includes the evocative ruins of an ancient city of carved rock tombs, called Mada’in Saleh. Like Petra, a popular tourist draw in southern Jordan, the city was built by the Nabataeans about 2,000 years ago.

The vast region has only 45,000 residents. There are some existing resorts, and France’s Accor chain recently agreed to manage one. Mr. Madani is planning an investment of up to $20 billion, from a mix of public and private sources, to finance airport expansion, hotels and other facilities to accommodate up to two million visitors drawn to archaeological sites as well as food and cultural attractions.

An even more ambitious scheme is under construction on Saudi Arabia’s western coast. The Red Sea project covers a remote area with 120 miles of coastline, more than 90 islands and extensive coral reefs that could one day be a diving and snorkeling paradise.

The Saudis want to put four dozen luxury hotels there, including 14 in a first phase, forecasting that these facilities will eventually contribute around $6 billion a year to the economy. Accor has agreed to participate, and the developers say they are in talks with other international hotel groups.

The Public Investment Fund, Prince Mohammed’s $320 billion vehicle for economic makeover, owns the Red Sea scheme and is providing some of the initial capital. Proceeds from the recent sale of a stake in the national oil company, Saudi Aramco, are likely to flow into the investment fund, and could finance other tourist projects.

Prince Mohammed chairs the Red Sea Development Company as well as the Al-Ula commission. John Pagano, Red Sea’s chief executive, said the prince knew the area “intimately” from excursions on his yacht.

On one occasion, the prince told the developers to think again about putting a resort on a certain island because the water surrounding it is not turquoise enough.

“We never made that mistake again, “ said Mr. Pagano, a former senior executive at London’s Canary Wharf development.

These projects are the size of small countries, and the prince is taking advantage of their scale and sparse populations to plan distinctive communities. The Red Sea development, for instance, will not be connected to the national electric grid and will rely completely on renewable energy like wind and solar, according to Mr. Pagano, who is a Canadian citizen.

Saudi Arabia’s conservative social mores will also be less in evidence, the developers say. The travel industry anticipates that alcoholic beverages, which are prohibited in Saudi Arabia, may eventually be sold in these new areas just as they are in Dubai, the Persian Gulf travel and business hub, whose mix of luxury and modernism appears to influence the prince’s thinking.

Mr. Pagano said he was not counting on the availability of alcohol. He did say that “what you typically see in the West” is likely to be permitted at Red Sea resorts. In other words, alcohol aside, travelers will be able to do as they please — for example, women will be able to sunbathe in bikinis.

Both the Red Sea and Al-Ula projects aspire to attract wealthy, ecology-minded tourists willing to pay a premium for a novel and relatively unspoiled destination. Some travel analysts say this approach may pay dividends.

“This planet is running out of places to go,” said Philip Wooller, Middle East director for the travel research firm STR.

Aman Resorts, a Swiss-based hotel group that caters to the wealthy and celebrities, is setting up three establishments in Al-Ula, with a plan to open in 2023. “There is a huge amount of culture to be discovered and explored, and that is exactly what our guests want to do,” said Anna Nash, a spokeswoman for the company.

Still, Mr. Wooller said, the Saudis are starting “at the very very beginning.” Although the kingdom accommodates about 15 million international visitors a year, the bulk of them for Muslim pilgrimages, tourism has largely been limited to side trips after business meetings. A huge training and hotel-building exercise is going to be required to meet the government’s goal of 100 million domestic and international visits by 2030, more than double the 41 million of 2018.

That’s a big leap in a kingdom that until recently has had little tourism. “If we had to live off tourists, we would be dead,” said Qamar Ahmed, who runs a combined antique store, art gallery and coffee shop called Desert Designs in Al-Khobar in eastern Saudi Arabia.

Moreover, while the crown prince has given a green light to some reforms, including allowing women to drive, some potential visitors may be alienated by the brutal killing of the journalist Jamal Khashoggi in 2018 by Saudi agents, and other repressive measures like jailing critics of the government.

“Saudi Arabia won’t be an easy sell for a lot of tourists,” said Henry Harteveldt, a travel consultant at Atmosphere Research in San Francisco. While Saudi Arabia might appeal to travelers who consider themselves explorers, he said, the kingdom has a “big cloud hanging over” its reputation because of the Khashoggi killing and because women are not treated as fully equal to men.

Still, the Saudis are trying hard to buff up their image. Arriving in Riyadh for business meetings, Carl de Stefanis, a New York venture capitalist, and his son, Erik, visited a welcome kiosk at the airport and were surprised to be treated to a tour of the city, a tasty dinner, and gifts including white Saudi robes and checkered head cloths.

“Just about everyone we met cared earnestly that we were enjoying ourselves,” Mr. de Stefanis said.

And for Saudi tourism entrepreneurs, it seems like a new day. For instance, Madawi Bander Al Saud says her company, The Traveling Panther, is preparing customized tours of the kingdom for clients from Japan, Mexico and Italy.

“For years we have been showing them pictures,” she said. “Now they get to come.”

Alan Rappeport and Tasneem Alsultan contributed reporting from Riyadh, Saudi Arabia.

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#MeToo Clashes With ‘Bro Culture’ at Ad Agencies

The empowerment of women was a major theme of Advertising Week, a yearly gathering of roughly 100,000 ad-industry people in New York. The female R&B group TLC kicked off the program with a concert called “Future Is Female,” and there were panel discussions with titles like “Mom Bosses,” “#RewriteHerStory” and “Time’s Up, Pay Up: We Will Not Wait 100 Years.”

The focus on women at the September conference ignited hope that the industry had learned something from the #MeToo movement. Then came closing night, with the rapper Pitbull taking the stage to perform the hit “I Like It.” Female dancers in revealing bodysuits surrounded him as he sang, “I ain’t playing with you, but I want to play with you.”

For the ad executive Heather DeLand, the Pitbull show was a sign that the industry had not really changed. “Who thought this would be a good idea?” she later told The New York Times. “Is this a tacky 2019 reboot of ‘Mad Men’?”

She was far from alone in feeling that the industry has not quite broken with its sexist past. Despite frequent criticism of gender imbalance in ad campaigns and the departures in recent years of several high-profile advertising executives, the business still rewards male executives who encourage or excuse inappropriate workplace behavior, and commercials promoting stereotypical images of women have not gone away.

A number of agencies have tried to address the concerns by signing on to diversity initiatives meant to improve gender and racial representation in ad campaigns and in the workplace, but their attempts have clashed with a workplace culture still fueled by testosterone and booze.

Creative teams are still led overwhelmingly by men, and women make up a third of chief marketing officers, although women and men join the industry in equal numbers, according to the trade groups She Runs It and the Institute of Practitioners in Advertising. The gender pay gap in marketing exceeds the average across other industries, according to Glassdoor.

The ad agency TracyLocke, which has done work for Pepsi and the rum brand Captain Morgan, signaled that it wanted to set itself apart by promoting “Feminist Fridays” on its social media accounts and hiring female illustrators to create portraits of famous women for a series called “Making Herstory.” But according to Karen Dunbar, who spent nearly three years in the Connecticut office as a freelance creative director and copywriter, it remains an uncomfortable place for women.

In a discrimination lawsuit filed against TracyLocke in June, Ms. Dunbar claimed that male colleagues referred to her as a “nagging wife,” suggested taping her mouth shut, threw papers in her face and rubbed her back in view of colleagues. She also accused Hugh Boyle, the company’s chief executive, of encouraging “male managers and subordinates to incorporate” a vulgar term for female genitalia “into their workplace dialogue.” (The suit has yet to be resolved.)

Teresa Brammer, the agency’s chief human resources officer, said that Ms. Dunbar’s accusations were found by external investigators to be without merit, adding that “there is no higher priority than creating a safe, fair and equitable workplace for our associates.”

Women at other agencies, even those that have created high-profile campaigns promoting diversity and equal treatment of men and women, said they still experienced the sexist treatment depicted on “Mad Men.” They described an industry steeped in “bro culture,” saying they are given nicknames like “the face” and “the body” and routinely passed over when it comes time to select who goes to conferences. Like their female predecessors from decades ago, they find themselves stuck on accounts for jewelry and beauty products.

Kate Catalinac, a creative director at BBDO, an international agency with headquarters in New York with clients including Alka-Seltzer, Ikea and Macy’s, said that a man working on the same account at another agency once told her he intended to rape her. She also recalled a client who offered her new luggage in exchange for sex. And she said she was asked “countless times” to arrange for coffee service during casting sessions by people who assumed she was not in a leadership role.

“Honestly, I have not seen change,” said Ms. Catalinac, who has worked in advertising 14 years.

Molly Dunn, a freelance brand strategist, said her 20-year career had been marked by repeated episodes of harassment, discrimination and retaliation. “Part of the problem with advertising is that there’s cachet in being like, ‘We’re all so cool, everyone’s O.K. with jokes about ridiculous things,’” she said. “It’s a lot of creative people, a lot of big egos, and there’s a huge allowance for bad behavior.”

Ms. Dunn said she was working in New York this year at Anomaly, an agency whose clients have included Coca-Cola and Beats by Dre, when she received an emailed invitation to a meeting in a space described as the “Taint Table.” “Taint” is slang for the perineum; the space linked two parts of the Anomaly office. Two other women, who described their experience at Anomaly on the condition that their names would not be used out of fear of professional repercussions, confirmed that people in the company used that term for the meeting space.

Anomaly, headed by a woman with a leadership team that is nearly 80 percent male, started an initiative last year called Unreasonable Equals. The goal: to improve gender equality in marketing and product design.

The company also helped Johnnie Walker mark Women’s History Month by replacing the male figure on whiskey-bottle labels with a new character, Jane Walker. The campaign won industry awards but drew mockery. The late-night host Stephen Colbert noted that “female drinkers everywhere will say, ‘Finally, a brand that’s condescending to me,’” and the actress Caitriona Balfe joked on Twitter that the whiskey was intended to be consumed “whilst sitting on a lady chair, in a lady room, which is part of a lady house, in a lady city, on a lady planet.”

Ms. Dunn said she believed her complaints about her colleagues’ use of the term “taint table” led Anomaly to end her contract early.

Karina Wilsher, the agency’s global chief executive, said in an email that Ms. Dunn’s contract “ended amicably, but came down to underperformance.” She added, “In the agency world today, there can often be noise and discontentment. Much of it is incredibly well-grounded and motivated by a genuine desire to advance the industry. In this case it is not.”

Ms. Wilsher conceded that the slang term for the meeting area was used by certain employees, but said it was not an official name. In June, Anomaly’s executive chairman, Carl Johnson, sent an email to employees telling them to avoid “stupid, offensive slang for meeting areas.”

In Richmond, Va., the Martin Agency, known for its Geico commercials, tried to reinvent itself after its longtime chief creative officer, Joe Alexander, left in 2017 amid reports of an investigation into multiple accusations of sexual harassment. The agency brought on its first female chief creative officer, Karen Costello, and first female chief executive, Kristen Cavallo, in its 53-year history.

“Obviously, there is a need for a new direction,” Ms. Cavallo said in a statement at the time. The agency has since said that it closed the wage gap between male and female employees and doubled the number of women on its board.

Mr. Alexander, the departed executive, has fought back, filing defamation lawsuits naming, among others, the Martin Agency and Diet Madison Avenue, an Instagram account that posted anonymous reports of sexual misconduct in the industry.

As ad agencies try to shed their sexist legacies, they are under pressure from some major clients to have more diversity in their ad campaigns and on their staffs. At the same time, some women have said that routine exposure to sexist workplace behavior caused them to leave the business.

Karen Kaplan, the chief executive of Hill Holliday, an agency based in Boston that has worked for clients including Bank of America, said the industry would continue to lose talented women if it did not change.

“We lost a lot of talent because of equity issues, and they don’t want to deal with that behavior again,” Ms. Kaplan said. “If we want to get them back, we are going to have to be very sensitive to what drove them out of the business to begin with.”

More than 20 agencies have sought certification from the 3% Movement, an organization that rates advertising companies on factors like turnover ratio by gender, parent support services and depiction of gender in ad campaigns.

Only seven agencies have passed, according to Kat Gordon, the organization’s founder. But one metric has improved in the past decade, she said: The number of women in top executive roles has “seen a dramatic uptick.”

Deidre Smalls-Landau is one of them. In August, she became the chief marketing officer in the United States for the marketing and media agency UM, which has created ads for Hulu and BMW.

“I would not say it’s been easy — I’ve almost always been the only one,” she said of being a black woman in a heavily white and male industry. “And when you’re the only one, you develop a very tough skin.”

Recently, Ms. Smalls-Landau said, there has been a “concerted effort” to improve diversity in advertising. UM is now 65 percent female, with more than 40 percent of its senior roles filled by women.

“We need to create a culture of belonging, where you don’t feel like you’re tolerated, but celebrated,” she said.

Mara Lecocq, who has worked in advertising for 13 years, said she started a database of female advertising workers called Where Are the Boss Ladies after realizing that she had never had a female supervisor.

“Agencies are giving us diversity inclusion initiatives,” she said, “but in a meeting, men will still talk over you.”

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You See Pepsi, I See Coke: New Tricks for Product Placement

First came product placement. In exchange for a payment, whether in cash, supplies or services, a TV show or a film would prominently display a brand-name product.

Then there was virtual product placement. Products or logos would be inserted into a show during editing, thanks to computer-generated imagery.

Now, with the rise of Netflix and other streaming platforms, the practice of working brands into shows and films is likely to get more sophisticated. In the near future, according to marketing executives who have had discussions with streaming companies, the products that appear onscreen may depend on who is watching.

In other words, a viewer known to be a whiskey drinker could see a billboard for a liquor brand in the background of a scene, while a teetotaler watching the same scene might see a billboard for a fizzy water company.

Streaming services could also drop in brand-name products based on when a show is being watched. Someone who watches a streaming show in the morning could see a carton of orange juice within a character’s reach, while a different viewer watching the same thing in the afternoon could see a can of soda.

It could start within a year, said Stephan Beringer, the chief executive of Mirriad, a virtual product placement company that has worked brands including Pepsi, Geico and Sherwin-Williams into ABC’s “Modern Family,” CBS’s “How I Met Your Mother” and the Univision program “El Dragón.”

Streaming services are more likely than traditional TV companies to pull off this specially targeted version of product placement because they have direct access to far more information on their customers. With every click of the remote, viewers tell the services something about themselves, information that can be used to determine which products might appeal to them.

This supercharged version of digital product placement is being developed at a time when the marketing business — which bet big on TV commercials for decades — needs new tricks to grab the attention of ad-hating cord-cutters.

Mr. Beringer, the head of Mirriad, said the current digital product placement technology has been successful enough to suggest that a bespoke version is a logical next step.

“Viewers have been educated to look away from advertising,” he said. “But we’re putting something in that contextually makes sense. If you do it well, and it’s not annoying, it can work.”

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The Pepsi can and Pepsi billboard were digitally inserted into completed scenes of the Univision show “El Dragon” by the virtual product placement company Mirriad.

Through digital video services like Hulu and YouTube, companies are already able to target viewers based on information about their ages, their locations, where they like to shop and other details. Some of the data is collected by the platforms themselves, others by outside data companies. And now streaming services are mulling how to make use of that information to create tailored product placements.

“Just like there’s no reason that all viewers of a program need to see the same advertisement, there’s no reason that they all need see the same brand integration or crossover campaign,” said David A. Schweidel, a marketing professor at Emory University.

Streaming platforms are trying out other advertising innovations, too. Hulu, a platform controlled by the Walt Disney Company, has ads that appear when a viewer hits the pause button. Last week, it rolled out specialized ads for people who are bingeing on three or more episodes of a show, with commercials for Kellogg’s, Maker’s Mark and Georgia-Pacific.

This year, the Walmart-owned streaming service Vudu enabled so-called shoppable ads on internet-connected televisions. With a click of the remote on the words “Add to Cart,” customers are able to drop an advertised product into their Walmart.com queue.

On the Roku Channel, a streaming channel on the company’s digital media player, viewers can click on certain commercials to request an email or text with details about the product on display. Roku, which spent $150 million this fall buying the software provider Dataxu to help companies plan and buy ad campaigns, then shares insights about the audience with the company behind the ad.

“Consumers are so much more empowered today to flip the dial, to change the channel, and many of the things they could switch to don’t have advertising at all,” said Scott Rosenberg, a senior vice president at Roku. “It’s incumbent on platforms and apps that are ad-supported to work harder at how they put ads in front of the consumer.”

Virtual product placement companies like Mirriad and its rival Ryff said they are talking with streaming services about using data to customize product placements to viewers. Mirriad and Ryff would not name their potential partners.

Product placement is appealing to streaming services because it allows them to work with companies without interrupting a show with commercials. Hulu, which comes in a low-cost ad-supported version and also has a commercial-free option for subscribers willing to pay more, said that so-called brand integrations on its platform have been far more effective than 30-second commercials at raising viewers’ interest in products.

Some skeptics say virtual product placements based on viewer preferences may turn out to be one of those innovations that does not catch on. A few well-placed TV commercials and billboards are likely to reach the same number of people with less trouble, said Joe Maceda, an executive at the media agency Mindshare.

“It’s hard to know if the juice is worth the squeeze,” he said.

The possibilities of individualized product placement were on display in “Bandersnatch,” an extended installment of the Netflix series “Black Mirror,” a speculative fiction show that specializes in horrifying tales of invasive technologies and exploitative digital companies.

“Bandersnatch” was interactive. Viewers determined how the story, set in 1980s Britain, unfolded by clicking on choices presented to them at various forks in the narrative road. Early on, the film asked viewers to choose between two breakfast cereals, Quaker Sugar Puffs or Kellogg’s Frosties. Their selection determined which one would appear in a commercial shown on a TV set in the background of a scene later in the film.

Sugar Puffs and Frosties were not included as part of an ad, Netflix said, but rather as a way for the “Black Mirror” creators to enhance the film’s 1980s setting. Netflix was not paid by the cereal companies.

But all those remotes clicking on one cereal or the other provided Netflix with data on its subscribers’ preferences. Reed Hastings, the Netflix chief executive, cited “Bandersnatch” during a webcast timed to an earnings report this year. Holding up two boxes of cereal, he announced that 73 percent of “Bandersnatch” viewers had selected Kellogg’s Frosties.

The other executives on the webcast chuckled.

“The most critical data point of the quarter!” joked Spencer Wang, a vice president.

Netflix, which does not run commercials, said it would not use the information it had gleaned from “Bandersnatch,” saying in a statement that “the privacy of our members is a top priority.”

But marketing executives like Ricky Ray Butler, the chief executive of the product placement company Branded Entertainment Network, are enthusiastic about the possibility of inserting brand-name products into streaming shows based on data generated by interactive programming. Actually being able to do so, he said, may still be a long way off.

“The world’s not ready for it yet,” he said. “We’re just at the tip of the iceberg.”

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Netflix is Ad Free, but It Isn’t Brand Free

Netflix subscribers like being able to glide through entire seasons of “Stranger Things” and “The Crown” without sitting through commercials for insurance and S.U.V.s with bows on the hood. Subscriptions, rather than advertising, drive its nearly $16 billion in annual revenue, and being commercial-free “remains a deep part of our brand proposition,” Netflix said in a statement.

While it is the dominant streaming platform, with 158 million global subscribers, Netflix also has a $12 billion pile of debt. And it is facing competition from deep-pocketed streaming newcomers like the Walt Disney Company and Apple. The research firm eMarketer said this month that Netflix’s “days at the top may be numbered,” and many analysts and executives wonder if, in order to keep its revenue strong, it will have to embrace ads.

“I don’t know why they wouldn’t,” said Peter Naylor, the head of advertising sales for the streaming platform Hulu.

Even as Netflix resists commercials, it is finding ways to work with brands. Last month, Netflix worked with the sandwich chain Subway to start offering a Green Eggs and Ham Sub (spinach-dyed eggs, sliced ham, guacamole, cheese) tied to the new Netflix series “Green Eggs and Ham,” based on the Dr. Seuss book. The sandwich generated a lot of publicity for Netflix in the lifestyle press while also putting the Netflix name in front of the millions of people who buy a Subway sandwich each day.

“We believe we will have a more valuable business in the long term,” Netflix said, “by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction.”

In another recent cross-promotion, Netflix charged the clothing company Diesel a license 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 being more flexible in the types of partnerships they can offer,” said Ellie Bamford, an executive at the marketing agency R/GA.

When Netflix worked with Samsung and Aviation American Gin on a commercial last month featuring the actor Ryan Reynolds and his new Netflix film “6 Underground,” no money changed hands. For Netflix, such deals are mostly about keeping people aware of the Netflix brand.

Netflix declined to say whether deals with companies would become a larger revenue stream in the future.

But companies have long been eager to go into business with Netflix, even before it scored 34 Golden Globe nominations this month. The platform has something brands crave: a young audience. Its average viewer is 31, part of a group highly sought by companies as younger people avoid broadcast and cable television and are known to hate ads.

“Brands want to be in front of this audience,” Ms. Bamford said. “Reaching these unreachables, these cord-cutters who don’t want to be fed an ad, is a huge concern.”

Major companies flirt with Netflix on social media, and Netflix is flirting back. This month, the company’s Twitter account, with seven million followers, participated in a saucy meme about things people say during sex, trading quips about it with the Wendy’s Twitter account (3.4 million followers) and Penguin Random House (1.3 million followers). Last spring, Netflix posted a tweet that included a photo of nine cast members from one of its original shows, “Sense8,” as they appeared to be celebrating in an Audi convertible, and then had a joking exchange about it with the Audi account (two million followers).

In contrast to its cheery social-media tone, Netflix is “not necessarily the easiest to work with” on promotional partnerships with companies, said Stacy Jones, the chief executive of the entertainment marketing company Hollywood Branded. She described Netflix as “very picky,” saying it “wants to be the lead.”

“They’re in a power position right now,” Ms. Jones said. “They know the market, and they’re controlling it and keeping it very tight.”

Netflix is careful to guard its reputation, asking some of the companies it has worked with to avoid putting its logo on dart boards, paper napkins and doormats. But marketing executives said Netflix was increasingly open to lending its name to outside projects, including joint marketing campaigns and products based on its shows.

With so much content, Netflix has had trouble sustaining attention for some shows, which can come and go in a weekend of binge-watching, never to be mentioned again. The arrangements with the brands are one way it can keep attention focused on a given program. This month, Netflix posted a job listing for someone who would develop products, games and events to “drive meaningful show awareness” and make them “part of the zeitgeist for longer periods of time.”

Netflix has a brand partnerships group, led by the executive Barry Smyth, which works with companies to use Netflix’s name in promotional campaigns and has recently hired people away from Fox, Lionsgate and other media companies. In a recent job listing for a position in Europe, Netflix said it wanted to “amplify the scope and impact of our marketing campaigns when we work with other brands.”

This summer, Netflix’s biggest series, “Stranger Things,” a supernatural sci-fi show set in the 1980s, struck deals with 75 companies. In one, Netflix teamed up with Baskin Robbins on new ice cream flavors like the chocolate-icing-topped Eleven’s Heaven, named after the character Eleven, and Upside Down Pralines, a reference to the alternate dimension in the show, the Upside Down. In another deal, Coca-Cola briefly revived the failed 1985 beverage New Coke, which appeared in “Stranger Things” episodes, adding to its retro atmosphere.

The brands did not pay to appear on the show, but Netflix took a licensing fee for a “Stranger Things” promotion in London designed by the immersive-theater company Secret Cinema, which recreated a mall from the series that sold special cosmetics from Mac and products from Coach. The pop-up mall opened in November, four months after Netflix made the show’s third season available to subscribers.

The platform does not need to make money from major companies to benefit from working with them. The idea is to fuel subscriptions by drumming up interest in its shows through alliances with “brands where we feel like their audience will love our content as much as our audience does,” Netflix said in a statement.

In a conference call with analysts this year, the Netflix chief executive Reed Hastings said the “Stranger Things” promotions were intended “to get more people excited about ‘Stranger Things,’ so they join Netflix, they tell their friends about it.”

The same logic may extend to product placements. Netflix has typically left such decisions up to individual producers, saying in a statement that “most of the brands that appear in shows and movies are added by creators who believe they add to the authenticity of the story.” Netflix added that “instances where those placements are paid are rare and not a business focus for us.”

That is a contrast with many of Netflix’s rivals, which have actively courted companies with offers to display their products onscreen — even introducing them to showrunners and providing them with script drafts. Hulu, for instance, has a team dedicated to working brands into its shows, with the number of paid arrangements increasing 200 percent from 2018 to 2019, it said. Netflix does not have an equivalent team.

Still, products have appeared in Netflix shows for years (In 2013, a blogger posted a slide show of at least 57 corporate mentions on “House of Cards.”) Research last year suggested that more brand-name products appeared on shows tagged as Netflix Originals compared with the ones it streams from other studios.

In the recent post-apocalyptic series “Daybreak,” characters comment on the array of products stockpiled in an apartment: Red Bull energy drinks, Settlers of Catan board games, Tide Pods and more. None of the companies paid to be included. But such product placements can be a boon to producers who are looking to have realistic props in a scene without having to pay for them.

In the new Netflix holiday movie “The Knight Before Christmas,” a character spends nearly three minutes exploring a Sony television and Amazon’s Echo smart speaker. Both products were included free, but their presence set off a flurry of news articles and discussions on social media. Although much of the commentary was mocking, it drew attention to an otherwise standard seasonal film.

Such appearances are part of a long history of corporate cameos, like Ray-Ban in “Top Gun” and Reese’s Pieces in “E.T. the Extra-Terrestrial.” Mike Myers even joked about product placement in “Wayne’s World”: “I will not bow to any sponsor,” he declared, posing with a slice from Pizza Hut.

Some streaming subscribers have deemed the constant presence of products to be annoying and “a big turnoff.” And many companies have tired of the effort that goes into negotiating product placements, wondering whether a few TV commercials and billboards could reach the same number of people with less trouble.

Carrie Drinkwater, the executive director of integrated investments at the Mediahub agency, said her team once tried to fit a client into the plot of the Netflix show “Unbreakable Kimmy Schmidt,” only to balk after the production company involved set an “astronomical” price.

“It’s a lot of money to integrate,” she said, “and it’s really hard to do it in an authentic way, and you don’t know how much it will resonate.”

Source:

NYT > Business


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