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Television technology keeps changing, but the basic weights and measures of the business remain the same. So you have to laugh when Mr. Hastings tells investors that he is beginning to study the ad game—which has been part of television for eight decades—and will try to "figure it out over the next year or two."
The first TV commercial, at least as best anyone can remember, was a 10-second ad for Bulova watches in 1941, consisting of an image of a timepiece on a map of the U.S. with the announcement "America runs on Bulova time."
In the 1950s, major corporations added their names to TV series, giving us "Texaco Star Theater," "The Colgate Comedy Hour" and "The United States Steel Hour," among others.
By the '60s, advertising jingles were hot. A writer named Richard Trentlage came up with: "Oh, I wish I were an Oscar Mayer Wiener, that is what I'd truly like to be. 'Cause if I were an Oscar Mayer Wiener, everyone would be in love with me." (It shows the enormous power of TV ads that I was able to type those lyrics from memory.) A recent marketing survey indicated that the most recognizable jingle nowadays is "Nationwide is on your side."
Soon "message ads" came into vogue, with spots like Coca-Cola's "Mean Joe Greene" in 1979, combining football, Coke and the civil-rights movement. (A white kid gives a black athlete, Joe Greene, his can of Coke and gets a football jersey in return. "Have a Coke and a smile.") As cable TV grew in the '90s, viewers got more infomercials: ads masquerading as entire programs, pitching products like George Foreman's "lean mean, fat-reducing grilling machine."
Probably the biggest breakthrough in ad-supported television came in 2007, when Hulu discovered that viewers would pay a monthly fee for programs that had commercials. Eight years later, Hulu began offering an ad-free tier at a higher price. It was as if a sneaker company sold a more expensive version of its shoes with the pebbles removed.
Netflix is likely to invert the offer, with a lower-priced alternative that comes with ads, leaving the top tier—for which the monthly rate was recently increased—essentially pebble-free.
Streaming technology is actually a boon for advertisers, allowing targeted ads and even triggering them when a program is paused. Streaming platforms also make it difficult to skip ads, which many viewers have learned to do with DVR playback of broadcast and cable programs.
As Mr. Hastings studies advertising history, he should review the Nike ad that Dan Wieden created, based on the last words of Gary Gilmore before he faced a firing squad: "Just do it."
(c) Peter Funt. This column originally appeared in The Wall Street Journal.
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