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For the first time, rather than just streaming context, Netflix is creating content for its own show, First Day, which will be produced like a television series but be viewable online and through Facebook. The move reflects a modern shift as consumers watch more content on iPads, iPhones, Facebook, and YouTube, rather than just through network or cable channels.

The idea seems appealing enough that Netflix already has lined up sponsors. Created by an executive producer of Gossip Girl, First Day centers on a young girl determined to go to the prom with her crush. All the actors will be outfitted in Kmart clothing, with each of the four main characters dressed in one of Kmart’s clothing brands. For example, the protagonist will wear Dream Out Loud by Selena Gomez. Because the production represents an extension of Kmart’s brand image, First Day will not allow any bad language or sexual innuendo.

Similar agreements were at work in the early days of television, when companies sponsored the broadcast content. As television became more popular, national networks realized that airtime was a scarce resource that they could sell to advertisers to earn massive profits. The new Internet video channel appears to be following the same evolutionary cycle.

If Netflix can make this experiment work, more companies are likely to follow. If the advertiser takes complete control of the content, it attains the ultimate kind of product placement. General Motors, Sony, and Intel are already spending more than $3 billion annually on web video ads and sponsored programming—a 43 percent increase from last year. What’s to keep them from moving into new channels as well?

Discussion Questions:

1. What do you think of brand-sponsored video content?

Sam Schechner and Lauren A.E. Schuker, “Lights, Camera, Advertisments,” The Wall Street Journal, September 14, 2011.