Netflix is moving up the schedule for the debut of its cheapest ad-supported plan to November, to come before the launch of the ad-supported Disney+ tier on December 8.
In July, Netflix told investors it was aiming for the ad-supported plan to launch “around the first part of 2023.” But now, ad-supported Netflix is scheduled to launch on November 1 in several countries, including the US, Canada, UK, France and Germany, according to industry sources who have been briefed on the streamer’s plans. That would be a little over a month before Disney+ Basic, priced at $7.99/month, hits the market in the US.
Netflix declined to comment. “We are still in the early days of deciding how to launch a lower priced ad-supported tier and no decisions have been made,” a company representative said.
Sources confirmed the new launch date of November 1, which was previously reported by the Wall Street Journal. Netflix and its exclusive ad partner Microsoft have asked ad buyers to submit initial bids next week, with a “soft CPM of $65,” the cost per thousand views, meaning the company is open to negotiating. advertising fees. That’s well above industry CPMs of under $20. Sources speculate that Netflix’s request for proposals from ad buyers will work like a Dutch auction, with the company looking to see what the market will bear.
Regarding the initial $65 CPM that Netflix and Microsoft have launched, one ad buyer said, “I guess they won’t get it.” The comments from the brands are “a lot of wait and see,” the source added. “On anything over $20 [CPM]the sentiment is, ‘Let other advertisers get into that group first.’”
Netflix is requesting a minimum commitment of $10 million in annual ad spending from agencies right now, according to a source. The company wants to block ad purchases before September 30 to meet the November 1 launch date. Netflix has told ad buyers that it expects to have around 500,000 customers on its ad-supported plan by the end of 2022. Netflix hasn’t looked at retail prices, but is reportedly looking at $7-$9 per month.
To head up its advertising business, Netflix recently hired Snap’s two top advertising executives: chief commercial officer Jeremi Gorman and vice president of sales Peter Naylor.
Initially, Netflix’s ad-supported service will not have any third-party attribution. It will also have limited targeting ability: Advertisers will be able to buy against Netflix’s top 10 most-watched TV series and against some content genres. But for now, Netflix will not serve ads based on geography (except by country), age, gender, viewing behavior, or time of day.
As previously reported, Netflix’s ad-supported tier will have a Ad load around 4 minutes per hour for the series. For movies, the streamer will run pre-roll ads, according to the sources. Netflix is setting frequency caps (how often an ad can be shown to individual viewers) of one per hour and three per day per viewer.which are relatively low by industry standards.