Netflix debuts ad tier details
The Future. In six short months, Netflix has its ad tier ready for primetime, coming to 12 major markets in November. With both a low price point and low ad load, Netflix hopes that the ad-supported tier can supercharge subscriber growth and kickstart revenue, especially as the crackdown on password sharing may lead to an overall loss of engagement.
Netflix finally got into the nitty gritty of its coming ad tier.
- THR reports that the tier will launch in a dozen countries, including the US, Mexico, Brazil, South Korea, and France, between November 1-12.
- In the US, the tier will cost $6.99 per month, with pricing in other countries at a similar price point.
- The tier will have about 4-5 minutes of ads per hour of programming (in 15-30 second spots). Original movies will only have pre-roll ads.
- Users will also be unable to download content for offline viewing, and about 5-10% of licensed content won’t be available to watch due to pre-existing deals.
Netflix expects its ad-supported tier to bring in as much revenue (or even more) per subscriber as its premium tier. It’s already almost sold out all of its ad inventory and expects 40 million global subscribers for the tier this coming year. Ampere Analysis says the company should generate about $2 billion in sales this year and $3 billion by 2027.
Down comes the garden wall
With Microsoft behind the tech and a couple of former Snap execs running point, Netflix’s ad tier will allow marketers to target users by things like country or what genre of content they’re watching. The plan is to keep data collection to a minimum and only be used to make advertising on the platform more precise.
The only data point that everyone will get a lot more of is actual viewership metrics. The company is partnering with Nielsen to measure viewership in the US, with DoubleVerify and Integral Ad Science verifying numbers.
That means the era of audiences (and even content creators) not knowing what’s popular on Netflix — unless Netflix itself tells them it’s popular — may finally be coming to an end.