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Netflix and Chill Ads
The Sandman © Laurence Cendrowicz & Netflix 2022.
Netflix’s new ad-led tier will attract viewers but will it also deliver for advertisers? Having long resisted ads and closely guarded its subscriber data the SVOD must change tack to provide the transparency, tracking and targeting expected by TV ad agencies.
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etflix expects to have 4.4 million unique viewers for its new advertising-supported platform by the end of the year after launching in a dozen markets, including the UK, France, Australia and the US. It also estimates that this tier could generate USD1.9 billion in ad revenues by 2027 in Western Europe alone. Virtually everyone agrees Netflix’s ad play will be successful. The question is whether getting into advertising changes a company which has closely guarded its own data and prided itself on forging a distinct path in the cutthroat world of entertainment. “[Netflix boss] Reed Hastings once characterised Netflix as an ad-free zone that allows viewers to relax without being exploited,” says David Cloudsdale,
founder at TV ad platform Adalyser. “If the man at the top considers advertising to be a form of exploitation, then he must hope his subscribers have not been paying much attention to him.” All major SVODs are set to offer a cheaper ad-supported tier to tap into a market of people who do not mind advertising but see existing subscription costs as excessively exorbitant. The goal is to reduce churn and increase revenues to sustain multi-billion content costs without cannibalising the existing subs base. “The user experience can’t be radically different to that which subscribers have come to expect,” says Lindsey Clay, CEO, Thinkbox. “Netflix has a very