Long ago, there were rumors that Netflix would release an ad-supported version of its service. Now, it turns out the company will bring the new version as soon as November. Thus, this will happen much earlier than initially expected, in early 2023. Moreover, this will happen earlier than Disney+. In this sense, we must recall that Disney plans to launch its own ad-supported version of Disney+ Basic on December 8.
Netflix has been surveying ad agencies and has asked advertisers to submit plans until September 30. As an agency executive said, this is an aggressive move from Netflix, which wants to enter the market before Disney.
Of course, there is a risk that after Netflix and other streaming services launch ad-supported versions, the number of subscribers will drop significantly. But this streaming company will solve this problem by inviting a variety of advertisers so that users won’t see repetitive ads.
This service version should cost $6 – $9 a month. At the moment, the standard plan is offered for $16. Also, it will limit ad time to four minutes an hour. This is in line with rivals such as HBO Max (whose parent company is Warner Bros.) and Disney+ Basic.
The ad agency meeting was led by Netflix’s new advertising partner Microsoft. Most sales are expected to be made directly by Microsoft representatives at the outset, not through the program. Netflix also named two former Snap executives to oversee the company’s ad sales: Jeremi Gorman will be president of global advertising, and Peter Naylor will be vice president of ad sales.
According to an analyst at financial services group Macquarie, the company’s ad revenue in the U.S. and Canada should be as much as 20% by 2025, reaching $3.6 billion, while worldwide advertising revenue will reach $8.5 billion.