After winning millions of viewers from TV channels, Netflix intends to delight its prized advertisers: the streaming giant is launching its new ad subscription in November in twelve countries, hoping to revive its incredible growth.
“We strongly believe that lower consumer pricing, combined with strong advertising monetization, will allow us to grow our subscriber base and, over time, generate significant additional revenue,” said Greg Peters, managing director of California Group Operations, during a press conference. Thursday.
5.99 € per month
The cheapest subscription will cost $6.99 per month in the US (€5.99 in France for the “Essentiel” price with ads) and will contain 15-30 second ads, broadcast at the beginning and middle of the shows.
The base offers without ads will remain at their current price ($9.99 in the US and €8.99 in France). And so the sector leader is cutting the grass under the foot of rival Disney+, which will launch its ad offering in December, for $7.99 a month, while its base subscription drops to $10.99.
Greg Peters noted that audiences’ transition from live television to on-demand programming, over the Internet, “has accelerated to the point that broadcasting has overtaken traditional channels and cable in the time spent in front of the station in the United States.” « La part de Netflix, sur ce temps de télévision aux Etats-Unis, n’est encore que de 8%, mais c’est plus que n’importe quelle chaîne, ce qui me semble important pour les annonceurs », at – adds .
Diving in the stock exchange
In the first quarter of 2022, Netflix lost 200,000 subscribers worldwide compared to the end of 2021. The news caused its share price to drop by 25%. Then, from March to June, 970,000 subscribers left the platform.
The sector leader, with more than 220 million subscribers in total, made two major decisions to reverse the trend. This will tighten the screw on the side of ID and password sharing, allowing multiple people to access the platform without paying. And he decided to introduce a subscription formula with ads, and even speed it up, after years of rejecting this lesser known solution.
Concretely, relevant users will see an average of 4 to 5 minutes of ads per hour. Their catalog will be restricted by about 15%, as Netflix cannot advertise some licensed movies and series. Children’s programs will not initially be affected by advertisements, and for some recent films the advertisements will be longer, but only initially shown.
Insider Intelligence’s Ross Bennis said the discounted price would “attract consumers,” “but since no Netflix users have seen ads at this time, it will be some time before a significant portion of existing viewers don’t embrace this formula.
Advertisers, from cars and luxury brands to tour operators, have responded in droves, according to Jeremy Gorman, Netflix’s director of advertising. “We pretty much sold off our inventory for the launch,” she said.
advertising targeting
In terms of targeting, they will be able to choose countries and genre (comedy, action, documentary, etc.) and exclude certain characteristics (violence, nudity, etc.), following the paradigm that prevails in traditional television.
Netflix, with the help of its partner Microsoft, will collect information such as the gender and age of its users and plan to do what is called behavioral advertising targeting, that is, customized according to people’s preferences. , for example on the Internet.
“It’s a win for our advertisers and for our subscribers,” Jeremy Gorman emphasized. “For people who choose formula with ads, it is important that you show them ads that match and talk to them. Personalization also drives brands up, as well-targeted ads at scale yield better returns on investment.
The company has not provided its pricing, but according to Wall Street Journal sources in an article in late August, advertisers will initially have to pay around $65 to target 1,000 viewers, and possibly $80 after that, a price considered higher than other streaming platforms. .
According to Insider Intelligence, broadcast advertising revenue could reach $30 billion within two years in the US alone, and possibly at least double that worldwide. The market is currently being crushed by YouTube.
#Netflix #launched #subscription #ads #November
