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Netflix wants to beat Disney+, aims for November 1 ad tier launch

Netflix plans to push forward the launch of its ad-supported subscription tier to early November in a bid to beat Disney+.

The detail comes from the Wall Street Journal, which reported on August 31st that some ad buyers claimed Netflix told them it would launch its ad tier on November 1st. Variety cited industry experts in a September 1st report corroborating the November 1st launch goal, noting the ad-tier would go live in “multiple countries, including the U.S., Canada, U.K., France and Germany.”

A November 1st launch would put Netflix about a month ahead of Disney’s planned December launch for an ad-supported subscription tier. It’s worth noting that Disney has only detailed plans for a U.S. launch — it’s unclear if an ad tier will come to Canada.

“We are still in the early days of deciding how to launch a lower-priced, ad-supported tier and no decisions have been made,” Netflix told Variety in a statement.

Variety also detailed some of Netflix’s reported ad bid expectations. Netflix partnered with Microsoft on ads and reportedly requested ad buys submit initial bids next week. Netflix reportedly sought a “soft $65 CPM” (CPM means cost per thousand views, and $65 USD is about $85 CAD). However, the industry standard is below $20 USD CPM (about $26 CAD).

Additionally, Netflix reportedly wants a $10 million USD (roughly $13.1 million CAD) minimum commitment in annual ad spending from agencies. The streaming giant hopes to secure ad buys by September 30th to meet the November 1st launch date. Interestingly, Netflix reportedly expects to have about 500,000 customers on the ad-supported plan by the end of 2022.

Netflix has tried to keep the details of its ad-supported subscription under wraps, but frequent leaks have provided information and steadily formed a clear picture of the platform. So far, we’ve learned that the company wants to charge $7-$9/mo for the ad tier, it won’t support downloading content for offline viewing, and not all Netflix content will be available on the ad tier. The company also reportedly doesn’t plan to put ads in kids’ programming or on new movies.

Source: Wall Street Journal, Variety Via: 9to5Mac

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Netflix targets $7-$9 monthly price for ad-supported tier: report

Netflix’s plans to launch a cheaper ad-supported tier have been the subject of much scrutiny over the last few months as information about it trickles out to the public. Now, Bloomberg is reporting the company could target a monthly price between $7 and $9 USD per month.

Bloomberg cited “people familiar with the company’s plans,” noting that Netflix also aimed to show four minutes of commercials per hour for the ad-supported service. Ads would appear before and during some programs but not after. Finally, the company reportedly wants to make smaller deals with advertisers, so it doesn’t overpromise and overwhelm viewers.

To put those numbers in perspective, most cable networks include 10 to 20 minutes of advertising per hour. Moreover, the $7 to $9 USD fee would be about $9.12 to $11.73 CAD per month, although it’s worth keeping in mind that a direct conversion of cost from USD to CAD likely doesn’t account for other factors. Netflix currently charges $9.99, $16.49, and $20.99 CAD per month for its Canadian plans, and $9.99, $15.49, and $19.99 per month USD for its U.S. plans. Ultimately, it’s hard to speculate on Canadian pricing based on rumoured U.S. pricing.

Speaking of speculation, Netflix called the Bloomberg report “all just speculation at this point” in a statement to The Verge. Netflix spokesperson Kumiko Hidaka went on to say that Netflix is “still in the early days of deciding how to launch a lower priced, ad supported tier and no decisions have been made.”

What to expect from the Netflix ad tier

Beyond the occasional bit of information that comes out in a report like Bloomberg’s, Netflix has mostly kept the details of its ad-supported tier under wraps. So far, it’s expected the company will launch the ad tier sometime in the last three months of the year in at least six markets. Netflix is working with Microsoft, which will handle the advertising technology for Netflix.

We also know that the ad tier will lack some shows and features available on Netflix’s other subscriptions. The former is an issue of licensing rights, with Netflix not holding the rights to advertise on some content — that content will not be available on the ad-supported tier. A notable missing feature from the ad tier will be offline downloads.

Meanwhile, Netflix competitor Disney+ is working on its own ad-supported subscription tier, which will launch stateside in December. Dubbed ‘Disney+ Basic,’ the ad-supported tier will cost $7.99 USD per month. That also happens to be the base price for the current Disney+ subscription in the U.S., which will jump to $10.99 USD per month in December. Disney hasn’t said whether the ad tier will come to Canada, but it’s worth noting the Canadian Disney+ is quite different with an $11.99 CAD per month cost and includes content that in the U.S. is available on Hulu.

Source: Bloomberg Via: The Verge

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Netflix reportedly won’t put ads in kids shows or new movies

Netflix’s planned lower-cost, ad-supported subscription tier will reportedly keep ads off of kids programming and new movies.

Bloomberg cites “people familiar with the plans” in a report detailing what Netflix programming will (and won’t) have ads. It’s the latest development in the ongoing saga of Netflix’s ad-supported subscription tier. Per Bloomberg’s sources, Netflix has told partners it won’t run ads during original kids programs. Moreover, some studios that license Netflix the rights to kids programs won’t allow the company to run ads on those programs.

As for movies, Netflix reportedly decided that original moves should stay ad-free, at least for a period of time. This would ease concerns from top filmmakers, who apparently were concerned about ads disrupting the viewing experience.

However, Netflix is still finalizing its plans for the ad-supported subscription. That means details could change before launch, which could be early next year, according to Bloomberg.

Based on what we know so far, Netflix’s ad-supported tier will cost less than its current subscription options but will inject ads into content. Netflix indicated it wants the ad-tier to be an option for cost-conscious customers and it doesn’t want to put ads into its other subscription tiers. Microsoft is slated to handle the ad technology for Netflix.

Moreover, Netflix has said not all content will be available on its ad-supported tier. This largely comes down to licensing, with Netflix not having the rights to show commercials on some content. Other reports indicated Netflix would remove the ability to download content for offline viewing for the ad-supported tier.

Netflix isn’t the only company working on an ad-supported streaming subscription. Disney is also developing one for Disney+, although it’s unclear if or when it will come to Canada.

Source: Bloomberg