Four months after announcing a hiatus, BTS perform in Busan

After winning millions of viewers from television channels, Netflix intends to delight their precious advertisers. The streaming giant is launching its new subscription with advertising in November in twelve countries.

This in the hope of reviving its breathless growth. “We strongly believe that a lower consumer price, along with strong ad monetization, will allow us to grow our subscriber base and over time generate significant incremental revenue,” said Greg Peters, Managing Director. operations of the Californian group, during a press conference Thursday.

The cheapest subscription will cost $6.99 per month in the US and will feature 15-30 second ads, played at the beginning and middle of programs. Basic offers without ads will remain at their current price ($9.99 in the United States).

The pioneer of the sector thus cuts the grass under the foot of its competitor Disney +, which will launch its own offer with advertising in December, for 7.99 dollars per month, while its basic subscription drops to 10.99 dollars. .

Audiences’ transition from live television to on-demand programs via the internet “has accelerated to the point where streaming has overtaken traditional channels and cable in time spent watching TV in the United States,” said Greg Peters. “Netflix’s share of this television time in the United States is still only 8%, but that’s more than any channel, which I think is important for advertisers,” he said. -he adds.

Sold out

In the first quarter of 2022, Netflix had lost 200,000 subscribers worldwide compared to the end of 2021. The news had caused its stock price to plunge by 25%. Then, from March to June, 970,000 subscribers left the platform.

The pioneer of the sector, which has more than 220 million subscribers in all, took two major decisions to reverse the trend. It will tighten the screw on the side of the sharing of identifiers and passwords, which allow many people to access the platform without paying.

And he resolved to offer a subscription formula with advertising, and even to accelerate its advent, after years of refusing this less prestigious solution. Concretely, the users concerned will see an average of 4 to 5 minutes of advertising per hour. Their catalog will be restricted by around 15%, because Netflix cannot advertise certain licensed films and series.

“Attract consumers”

Children’s programs will initially not be affected by ads and for some recent movies, ads will be longer, but only run at the very beginning.

The reduced price will “attract consumers”, believes Ross Benes of Insider Intelligence, “but since none of the Netflix users are seeing ads at this time, it will take some time before a large share of current viewers does not adopt this formula”.

Advertisers, from car and luxury brands to tour operators, have responded in droves, according to Jeremi Gorman, Netflix’s director of advertising. “We pretty much sold out of our inventory for the launch,” she said.

Advertising targeting

In terms of targeting, they will be able to choose the countries and the genre (comedy, action, documentary, etc.) and exclude certain characteristics (violence, nudity, etc.), following the predominant model on traditional television.

Netflix, with the help of its partner Microsoft, will collect information such as the gender and age of its users and plans to do so-called behavioral advertising targeting, i.e. personalized according to people’s preferences. , like on the Internet.

“It’s a win-win for advertisers and for our subscribers,” assured Jeremi Gorman. “For people who choose the formula with ads, it is important to show them ads that correspond to them and speak to them”. Personalization also drives up prices for brands, as finely targeted ads at scale bring better returns on investment.

The company hasn’t given its pricing, but according to Wall Street Journal sources in an article in late August, advertisers will initially need to shell out around $65 to target 1,000 viewers, and possibly $80 thereafter, a price considered higher than other streaming platforms.

According to Insider Intelligence, advertising revenue from streaming could reach $30 billion within two years in the United States alone, and probably at least double that globally. The market is currently crushed by YouTube.

This article has been published automatically. Sources: ats / afp

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Four months after announcing a hiatus, BTS perform in Busan