Netflix calls November ad-level debut report and hefty rate demands 'speculation' - Deadline

Netflix calls November ad-level debut report and hefty rate demands ‘speculation’ – Deadline

Netflix has dismissed a report about aggressive moves in its cheaper ad-supported tier launch as “speculation”.

The Wall Street Journal, citing unidentified ad buyers who have been meeting with Netflix in recent days, reported that the company plans to charge a CPM (i.e. the fee for advertisers to reach 1,000 viewers) of $65. That price, which the report said could rise to $80 once the ad-supported Netflix concept becomes more established, was described as “substantially higher than most other streaming platforms.”

Contrary to Netflix’s estimates in July that it would release the ad-supported plan in early 2023, the Daily They also said buyers have indicated the real target is November 1.

“We are still in the early days of deciding how to launch a lower-priced, ad-supported tier, and no decisions have been made,” a Netflix spokesperson said in a statement provided to Deadline. “So this is all just speculation at this point.”

Netflix’s fight to capture a share of the tens of billions spent each year on streaming ads is designed to provide a hedge against subscriber saturation and declining revenue. For years, company executives insisted they had no plans to accept advertising, with co-founder and co-CEO Reed Hastings emphasizing his concerns about subscriber privacy at the time. All that changed in April when the company reported a surprising decline in subscribers, a setback it hadn’t faced in more than a decade.

The signs that Netflix intends to execute its plan to enter the market with an offer for advertisers and also a way to attract new subscribers have grown stronger. Netflix remains the world’s leader in subscribers, with nearly 221 million, but Disney has ramped up rapidly and plans an ad-supported level for December. Of the new guard in streaming, only Apple TV+ has remained ad-free, with HBO Max, Paramount+ and Peacock entering the ad-supported space.

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Streaming subscribers balk at idea of ​​switching from ad-free tiers to ad-supported tiers despite cost savings: study

Netflix announced a team with Microsoft for the ad-supported plan, saying on Tuesday it had hired former Snap executives Jeremi Gorman and Peter Naylor to spearhead the ad effort. Consumer pricing and key details about the ad experience, such as whether programming will be interrupted or “pre-roll” ads that would play only before programming begins, are yet to be determined.

Buyers told the Daily that 15- and 30-second slots are being considered both before and during programming, with no more than four minutes per hour. As with other broadcast media, ad loads are about one-third to one-fourth that of traditional linear television.

The opportunity to develop an additional income stream is important, according to many Wall Street analysts. A recent report by MoffettNathanson estimates that annual ad streaming revenue will reach $1.2 billion for Netflix by 2025.

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