Netflix reveals release date and price of ad-supported tier, undermining Disney – Deadline

Netflix is lowering the price of Disney+ by a dollar a month as it prepares for a historic expansion in advertising-supported transmission.

The company said its new subscription tier, Basic with Ads, will cost $6.99 per month and will launch on November 3 in the US, more than a month before Disney launches the ad-supported version of Disney+. December 8th. Canada and Mexico will get the new plan on November 1 and two days later it will launch in the US, Australia, Brazil, France, Germany, Italy, Japan, Korea and the UK, followed by Spain on November 10. , the entry-level price will be less than half the cost of the most popular tier, Standard, which costs $15.49 per month.

Disney has announced price increases and a new ad-supported version of Disney+. When that new tier launches on December 8, it will cost $7.99 per month, which is currently the standalone price for ad-free Disney+. After December 8, Disney+ ad-free will cost $10.99, though many consumers opt for the Disney+, Hulu and ESPN+ bundle, which offers savings on the regular price of each.

In a blog post, Netflix COO Greg Peters said there will be between four and five minutes of ads per hour, and that both series and feature films will be ad-interrupted. (See a video below showing what it will look like.)

Jeremi Gorman, Netflix’s head of worldwide advertising, said inventory is nearly depleted, with several hundred advertisers in the mix. When asked during a Zoom call with members of the press about how much advertisers were paying, he declined to provide details. As for categories, politics will be a notable no-fly zone given how prominent they have been on linear TV in recent election cycles, along with others like guns, smoking, or plugs for whatever products and services Netflix deems illegitimate.

Asked on the Zoom call to expand the ad plan during movies, Peters clarified that new movies coming to the service, particularly marquee originals like knives out 2 – “will only have one pre-roll” of ads before the feature plays without interruption. “We’ll try to preserve that kind of cinematic model there,” consistent with the way most rivals handle it. By contrast, movies that “have been on the service for a while,” Peters said, will have a more “traditional” mix of pre-roll and mid-roll ads, albeit with “less frequent” breaks.

It’s hard to overstate the degree to which the company has invested its long-standing position in advertising. Co-founder and co-CEO Reed Hastings and other executives spent years denying that Netflix would ever work with Madison Avenue, and Hastings cited his desire to avoid entanglements over privacy and other complications that have stymied Facebook and other digital giants. “We want to be the safe haven where you can explore, stimulate, have fun and enjoy yourself, and not have any controversy about exploiting users with advertising,” Hastings said on a 2020 earnings call.

However, that was during relatively happy days. In 2020, when Covid shut down the world, Netflix saw a massive increase in subscriptions, adding 26 million paying customers in the first half of the year alone, equivalent to the total for all of 2019.

This year, the impact of inflation and a worsening economy on consumers, as well as intensifying competition in a subscription streaming race that Netflix once ran virtually alone, have combined to create new headwinds. When Netflix posted two consecutive quarters of disappointing subscriber numbers, even losing total subscribers for the first time in more than a decade, that misfire triggered a sell-off in Netflix stock and sparked a series of changes at the company. In addition to cutting costs and optimizing its staff, the company decided to change its stance on ads, realizing the potential to add billions in revenue. A partnership with Microsoft was announced and two top Snap executives, including Hulu’s former head of ad sales Peter Naylor, were hired to lead the Netflix brand foray.

Not all programming will include ads at launch. The blog post noted that “a limited number of movies and TV shows will not be available” in Basic with Ads “due to licensing restrictions, which we are working on.” During the press call, Peters said that the missing titles represent between 5% and 10% of the total pie. “Everything is based on agreements, not on a specific study,” she said. “And again, we will work to reduce that number over time.” Most of the previous deals with content providers were forged “in an earlier time period where we weren’t contemplating doing an ad-based tier.” As Peters noted at the top of the call, it’s only been six months since Hastings stunned Wall Street and the media business by apparently mentioning the advertising plan during a quarterly earnings call and finalizing the marketing plan.

The blog post also noted that Netflix has partnered with DoubleVerify and Integral Ad Science “to verify the viewability and traffic validity of our ads” beginning in the first quarter of 2023. Also next year, Nielsen will use your ad ratings. in the US, allowing the measurement company to offer insight into how viewership is faring, reporting the numbers eventually through its long-in-development Nielsen ONE offering.

No downloads will be allowed on Basic with Ads and the resolution is 720p, not as sharp as the 1080p on Netflix’s most popular Standard plan.

Take a look at the experience of advertising on Netflix, with this example that the company gave of what a spot will look like before an episode of Emily in Paris:

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