Netflix asks for a premium on ad slots

The Future. Netflix’s ad tier is coming out swinging, possibly setting an ambitious November debut, high price points for brands looking to get in on the action, and a slim ad load for viewers worried that content is about to be overrun by commercials. With insiders saying that Netflix will be able to target ads to people based on the type of content they’re watching, the streamer may mainstream the idea of serving ads that match the tone of what audiences are watching as well… so people don’t feel “taken out of” the experience just because they’re paying less.

The Super Bowl of streaming
On the heels of both striking a deal with Microsoft to run ad sales and tech and hiring two Snap execs to oversee the venture, it’s rumored that Netflix will launch its highly anticipated ad tier by November 1.

So, details about the service are starting to emerge…

• Per WSJ, Netflix knows it’s the hot ticket on Madison Avenue and is looking to charge advertisers $65 for reaching 1,000 viewers (aka CPM), which is much higher than what the other streamers ask.
• But Netflix thinks it can eventually charge $80 per 1,000 views. It also wants to cap brands at $20 million in ad spend… so people don’t feel like they’re constantly seeing the same ads.
• Speaking of caring about its viewers, the streamer is considering a price point between $7 and $9 per month (but a decision is still up in the air).
• Netflix plans to limit ads to 15 to 30 seconds, with only four minutes of ads per hour of programming (less than most streamers).
• Additionally, Netflix will give advertisers a little bit of targeting capability, including serving ads specifically to people watching Netflix’s Top Ten shows or movies in the US or people watching either a comedy or drama.

If analysts thought Netflix’s original ad tier launch goal of “early 2023” was ambitious, why is Netflix rushing even more to get this service up and running? Netflix will never outright say it, but experts believe it’s looking to beat Disney+, which is also expected to debut its ad tier by the end of the year.

The race for revenue is on.