Shulou(Shulou.com)11/24 Report--

Beijing time on September 9 morning news, it is reported that streaming giant Netflix (Netflix) will launch its ad-supported version in November, earlier than the initial expected launch time in early 2023, and more than a month earlier than rival Disney. Disney plans to launch its own ad-supported version of Disney+ Basic on December 8.

Netflix, the streaming giant, has been investigating ad agencies to get them to support its schedule and has asked advertisers to submit plans by Sept. 30. An agency executive said it was an effort to get into the market before Disney.

The company stressed that while trying to reverse the decline in subscriptions by offering viewers a compromise, it also wanted to preserve a high-quality viewing experience: pay less in exchange for seeing some ads while watching Stranger Things or Bridgerton. Advertising will be front-and-center, the company said.

"The ad volume will be very small and they want to have a variety of advertisers and brands so viewers don't see duplicate ads, which are still common in connected TV," said one buyer who saw the demo. "

Netflix is considering charging viewers $6 to $9 a month for the ad series, compared with its standard $16 fee. Bloomberg first reported on the pricing and plans to limit advertising to four minutes per hour, in line with rivals HBO Max (whose parent company is Warner Bros. Discovery Channel) and Disney+ Basic.

Ad agency meetings are dominated by Netflix's new ad partner Microsoft, which sends salespeople with social and search backgrounds rather than connected TV backgrounds.

Most sales are expected to initially be done directly by Microsoft representatives rather than through programs. Netflix on Tuesday named two former Snap executives to run ad sales for the company: Jeremi Gorman will be president of global advertising, and Peter Naylor will be vice president of ad sales.

Netflix is moving into an increasingly competitive streaming advertising space, with companies like Disney + and Amazon's FreeVee planning to ramp up advertising efforts.

In addition to emphasizing the viewing experience, Netflix is also aggressively promoting its global reach, which is an important factor in its rapid growth and sets it apart from many competitors.

Wall Street has been bullish on these advertising schemes. An analyst at Macquarie, the financial services group, upgraded the stock, citing optimism about the company's advertising business and predicting it will earn as much as $3.6 billion in advertising revenue in the US and Canada and $8.5 billion worldwide by 2025.

But Netflix also charged a high fee for a product that advertisers felt lacked certain elements, prompting complaints that the product was rushed and not worth the price, with one buyer accusing the platform of "hubris."

A buyer who saw the company's demo said the company was looking for CPM of more than $60 (a cost of up to 1000 people), which would make it the most expensive streaming platform. HBO Max and NBC Universal's streaming platform Peacock initially charged similar fees, but both have since lowered their prices, typical of mature platforms. HBO Max, for example, cost less than $50 earlier this year. Netflix is also demanding an eye-popping $20 million commitment from each advertiser.

Unlike these streams, Netflix doesn't offer advertisers some of the features they expect, such as using third-party services to verify that ads work and reach their target audience.

"They're asking for it, not selling it," complained another buyer who had seen the demo."They're new to it all. "

Netflix also doesn't offer advertisers the exclusive deals they normally need to ensure their ads don't tie up with competitors 'ads. A buyer who saw the demo said the company didn't say whether it would block competing brands from appearing in certain programs through embedded ads.

Aside from Netflix's ability to target ads by content type, advertisers hear little information about what content their ads will target and how many audiences they will reach. Media reports say Netflix expects to attract about 500,000 subscribers through advertising by the end of 2022, compared with about 220 million total subscribers for the streaming service.

"We're still deciding how to launch an inexpensive, ad-supported version in its early stages and nothing has been decided yet. So at the moment it's all speculation,"a Netflix spokesman said. Microsoft did not immediately respond to a request for comment.

Still, after years of saying it doesn't sell ads, Netflix is finally opening the door--and it's likely that many advertisers will flood in to have their brands appear first on the company's new service.

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