The final stretch of the year will be marked by the race of the two main global streaming platforms to launch their ad-supported versions. If Disney+ recently announced the premiere of theirs for 8 December in the US, Netflix is bringing forward its planned schedule for the first quarter of 2023 and will do so on 1 November, according to Variety and The Wall Street Journal. The main reason for this change is precisely to obtain the best possible commercial agreements by beating its biggest rival to the punch.
In fact, it is planned that this exit will cover more markets than the domestic one and include countries such as the United Kingdom, France and Germany. The same sources detail that Netflix and its commercial and technological partner Microsoft are asking for CPMs of around 65 dollars, well above the 20 or so that are common in this sector but below the 80 that they hope to eventually charge.
They are also asking for a minimum commitment of $10 million in annual planning from agencies to access what they estimate will be half a million users in this ad-supported version by the end of this year. What has not yet transpired is what it intends to charge these customers, although the company was considering rates in the range of 7-9 dollars a month.
At the start of this model, Netflix will not allow any third-party attribution and will have a limited capacity for segmentation, as it will not allow it to operate on geography beyond country, age, gender or consumer behaviour. Moreover, spot buyers will only be able to operate on the platform’s most popular series and some genres. Spots will be 15 and 30 seconds, and will appear before and during those slots.
The company is accelerating its plans to consolidate the most profitable advertising deals possible against its major competitor.
As previously announced, the maximum advertising density will be around four minutes and the frequency will be very controlled. In this respect, Netflix wants to offer an experience that does not generate the complaints common in other services due to users’ continuous exposure to the same ads, and will only show each campaign once an hour and up to three times a day for each customer. This also explains why it has limited the annual investment of any brand to $20 million in these early stages.