As Netflix prepares to launch its highly-anticipated ad-supported tier, advertisers are likely thinking about how to tap into the streamer’s distribution reach – though it may come at a cost.
According to a Wednesday report from The Wall Street Journal, Netflix could charge advertisers up to $65 for reaching 1,000 viewers, or cost per thousand. WSJ received this information from ad buyers who met with Netflix and its ad partner Microsoft last week.The price is higher than what streaming platforms typically charge advertisers, said the buyers, according to WSJ.
Some of the buyers told the outlet Netflix wants to cap the amount any brand can spend at $20 million per year. This is to ensure Netflix viewers don’t see the same brand too often on the platform.
Netflix previously stated it aims to launch its lower-cost, ad-supported tier early next year. COO Greg Peters said on the second quarter earnings call Netflix wants to take a “crawl-walk-run” model delving into the ad space.
But Netflix with ads could debut as soon as November 1, ad buyers told WSJ. They also said Netflix plans to sell 15- and 30-second ads that would appear before and during some programming.
The launch date and ad pricing are still up in the air, as Netflix recently told Deadline the WSJ report “is all just speculation at this point.”
And this doesn’t mean every Netflix title will get ads. Bloomberg previously reported the streamer doesn’t plan to run ads during original movies and kids’ shows.
Mark Gent, Interpret’s SVP of media strategy, told Fierce Video Netflix showing targeted ads to children would introduce privacy and data compliance concerns. So, it makes sense Netflix doesn’t want to go down that route.
To help build its ad-supported tier, Netflix this week hired Snap Inc.’s Jeremi Gorman and Peter Naylor – both of whom have notable experience in the advertising industry. Gorman will serve as president of worldwide advertising, while Naylor is signing on as VP of ad sales.
Disney+ is the other major streaming service getting into ad-supported streaming, aiming to launch the new tier on December 8. Disney said the tier will cost $7.99 per month, and plans to raise the price of ad-free Disney+ from $7.99 per month to $10.99 monthly.
Netflix has yet to announce a price tag for its ad-supported version. A Bloomberg report from last week said the tier could cost between $7 to $9 per month. Currently, Netflix’s cheapest plan (limited to one screen with no HD access) costs $9.99 monthly.
On the content front, Netflix continues to amass significant viewership numbers. The series “Virgin River” obtained 2.4 billion minutes streamed for the week of July 25. Netflix recently wrapped up the fourth season of “Stranger Things,” which saw around 1.6 billion hours viewed in its first 28 days.
News Source: FierceVideo