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Advertising: What’s up with Netflix’s ad-supported tier?

Initial reports suggested Netflix’s ad-supported tier was off to a rocky start. However…

Netflix’s President of Worldwide Advertising Jeremi Gorman shared positive news about the streaming platform’s jump into the ad business.

Netflix’s President of Worldwide Advertising Jeremi Gorman shared positive news about the streaming platform’s jump into the ad business.

Looking good: Jeremi says the company is “pleased with the growth,” but couldn’t disclose more because Netflix has yet to announce its earnings report.

Another big positive is that debutant advertisers come from “across the board,” from CPG brands to automotive companies, luxury brands, and more.

But it’s not all roses: Several challenges could hamper Netflix this year, like…

  • Premium pricing. Looks like Netflix may adjust CPMs as it expands the ad network. Jeremi says the market will “dictate reasonable costs.” Hmm…
  • Advertising rights. Much of Netflix’s content isn’t eligible for ads due to contracts made before the ad-supported tier was a thing. So the platform currently has a limited ad inventory, though Netflix is renegotiating old deals to expand it.

At least Netflix is aware of the issues, and working openly to mitigate them.

Why we care: As Netflix keeps expanding by adding new advertising partners and “adjusting prices,” there’s a possibility that they could become a viable option for small businesses.

It could be worth tracking the developments and looking for an opportunity to jump in. Let’s wait and see…

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