Tag: ad tier

Categories
Mobile Syrup

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

Categories
Mobile Syrup

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

Categories
Mobile Syrup

Netflix CEO says not all shows will be available on the ad-supported tier

As Netflix continues to lose subscribers, the company has confirmed that its planned ad-supported subscription tier won’t feature all of the content available on the platform.

Per Deadline, Netflix co-CEO and Chief Content Officer Ted Sarandos confirmed on a recent earnings call that the content difference, attributing it to licensing issues:

“Today, the vast majority of what people watch on Netflix, we can include in the ad-supported tier. There’s some things that don’t and we’re in conversations with the studios on, but if we launched the product today, members in the ad-tier would have a great experience. We will clear some additional content but certainly not all of it but don’t think it’s a material holdback for the business.”

While a bit of a bummer that some content won’t make it to the cheaper ad tier, it seems like all the Netflix original content will be available. I’d argue that’s the more important thing for the ad tier since Netflix is the only place to get Netflix originals — if that’s what you’re after, then the ad tier may be perfect.

Netflix has been thinking about a lower-cost, ad-supported tier for a while now (if you believe the rumours). Sarandos confirmed it was something the company was looking at back in June, noting the goal was to offer a cheaper subscription for customers who were willing to watch ads and pay less. Later, Netflix confirmed it was working with Microsoft to handle the advertising technology.

All this comes as Netflix continues to lose subscribers. The company reported a loss of 1.3 million between the U.S. and Canada, and in the previous quarter, it lost 200,000 subscribers. The losses come after Netflix repeatedly increased subscription prices in the U.S. and Canada.

In other Netflix news, the company is continuing tests on ways to crack down on password-sharing and get customers to pay for it. The most recent test added a charge for additional households in several countries, including Argentina and Honduras.

Source: Deadline Via: 9to5Mac

Categories
Mobile Syrup

Netflix CEO confirms plans to launch cheaper subscription with ads

Following reports that Netflix was considering a lower-cost, ad-supported subscription tier, co-CEO Ted Sarandos confirmed the company’s plans.

According to The Hollywood Reporter (via The Verge), Sarandos confirmed the plans during an interview at the Cannes Lion advertising festival.

“We’ve left a big customer segment off the table, which is people who say: ‘Hey, Netflix is too expensive for me and I don’t mind advertising.’ We [are] adding an ad tier; we’re not adding ads to Netflix as you know it today. We’re adding an ad tier for folks who say, ‘Hey, I want a lower price and I’ll watch ads,’” Sarandos said in the interview.

The news doesn’t exactly come as a surprise. Netflix has been expected to launch an ad-supported subscription tier for a while, due in part to the company’s other co-CEO, Reed Hastings, saying he was open to the idea in April.

Moreover, Sarandos’ comments come on the heels of Netflix losing subscribers for the first time in over a decade. In Q1 2022, Netflix lost 200,000 subscribers compared to Q4 2021. Although Netflix remains the largest streaming platform with 222 million subscribers, the subscriber loss clearly has the company thinking about ways to bring new people in. Whether offering a cheap, ad-supported tier is the way to do that remains to be seen (maybe a better idea would be reversing any of the numerous recent price hikes).

There are also questions around which company Netflix would partner with on ads. A Wall Street Journal report said Google and NBCUniversal were top contenders, but Sarandos wouldn’t give any details when pressed during the interview. Instead, Sarandos said the company might use a partnership in the interim while it builds out its own ad business.

Finally, it’s worth noting that Netflix isn’t the only streaming service considering an ad-supported tier. Disney has detailed plans to bring ads to Disney+ starting in the U.S. this year and to international markets in 2023, although it’s unclear if that includes Canada. Disney plans to run an average of four minutes of ads or less per hour, with no political or alcohol ads and no ads on shows aimed at pre-school audiences.

It remains to be seen if people are willing to pay for ad-supported streaming. From what I’ve seen, the general consensus online is that people are willing to have ads, or willing to pay for an ad-free experience, but not both.

Source: The Hollywood Reporter Via: The Verge