netflixThe plan to create an ad-supported subscription tier is progressing rapidly. A recent the wall street journal report claimed that the streamer was looking to launch its new option in November, 1st in order to arrive on the market before a similar offer of Disney+. To meet this deadline, Netflix must convince advertisers that its untested formats justify the high price tag that would have been attached to them.
When Netflix CEO Reed Hastings first suggested his company might launch a subscription with ads, he said the product could be developed “over the next couple of years.” A lot has changed, however, since Netflix hired two Snap executives – Jeremy Gorman and Pierre Naylor – to direct its advertising activity.
On August 10, Disney announced that an ad-supported tier for Disney+ would launch in December. Three weeks after the announcement of this news, the WSJ report speculated on an accelerated timeline for Netflix’s offering. As Sega Dreamcast fans will tell you, the “launch before your competition” strategy is risky, but in the hyper-competitive world of streaming, every advantage counts.
Subscribe for Tubefilter’s Daily Top Stories
If Netflix tries to roll out its ads on November 1, it needs to work quickly to win over potential ad partners, but many buyers remain skeptical. One sticking point is the proposed price of Netflix inventory. The streamer reported throwing in a CPM of $65 as the asking price. According Digidaythat would make Netflix ads more expensive than Super Bowl 2021 ads.
There’s a good chance the 1,000 Netflix Impressions price will drop during negotiations, but potential buyers have plenty of other questions about Netflix’s new service. Now that the streamer has an in-house ad sales team, what role is left for Microsoft, the Netflix company brought in as an official ad partner? What type of targeting will be available? When will Netflix enable third-party tracking on its ads?
So far advertisers seem to have more questions than answers. “We want to advertise on Netflix,” said a potential buyer Digiday. “It’s just that they could have come up with something reasonable and everything could have gone more smoothly. But that’s not what they did.”
If Netflix really wants to launch this product on November 1, one wonders how much inventory the company will be able to sell. Even interested buyers expressed reluctance. “To anything over $20 [CPM]the sentiment is, “Let’s get the other advertisers into this group first,” said one buyer. Variety.
Netflix itself has remained silent regarding these ongoing negotiations. “We are still in the early days of deciding to launch a low-cost, ad-supported tier, and no decision has been made,” a company representative said. Variety. “So this is all just speculation at this point.”