Netflix’s Ad-Backed Tier Will Be Missing Some Series And Films At Launch But COO Greg Peters Calls It “A Very Small Minority Of Viewing”
Netflix’s ad-supported tier will be missing certain series and movie titles at launch, the company conceded today in announcing details about the rollout. Greg Peters , the company’s product chief and chief operating officer, described the number of absent titles as “a very small minority of viewing,” estimating it at about 5% to 10% of the total available to ad-free subscribers. That content gap will shrink over time, Peters promised, as negotiations with producers and studios continue.
• None Kurt Sutter’s Western ‘The Abandons’ Rustles Up Series Order At NetflixAsked during a press call about whether missing titles come from any particular source, Peters said it doesn’t break down neatly that way. “It’s all based on deals,” he said, “so it’s not a specific studio. It’s mostly about what the state of the deal was and, again, we’ll work to reduce that number over time.”Pressed about why Netflix didn’t run the table and get 100% of programming onto the new Basic with Ads plan, Peters said deals were struck in past year s , “in a timeframe when we weren’t contemplating doing an advertising-based tier. Sometimes, those rights were included just based on what the terms of the deal were, sometimes they weren’t, so we didn’t fight for them or pay for them then because we didn’t really know that we’d need them. So, we’ve been incrementally working back through those deals.” He declined to offer specifics about how much extra the company had paid to secure rights to stream some titles with ads .The landmark decision to pursue advertising followed an extremely rough stretch for the company, when it reported disappointing subscriber numbers for two straight quarters, including the first year -over- year decline in paying customers in 11 year s. In the months after Co-CEO Reed Hastings mentioned the company was planning to finally get in the ad business during an April earnings interview, moves like a team-up with Microsoft and the hiring of two seasoned digital ad execs from Snap to lead the effort followed. The company has also pacted with Nielsen and other third parties on measurement and verification.On the press call, global ad chief Jeremi Gorman said hundreds of advertisers had come aboard, with inventory nearly sold out. More broadly, of course, advertising has increasingly penetrated streaming, which used to have a distinct bias toward ad-free services. HBO Max added an ad tier in 2021 and Disney followed with its plan to add an ad tier of Disney+, which will debut December 8. Today, Apple TV+ is the only major holdout without a stated plan to incorporate ads . Amazon didn’t have to shift gears with Prime Video scripted fare in order to reap significant revenue from ads . Instead, the tech giant secured rights to the NFL and other sports, which by definition is a major sandbox for advertisers.When Netflix’s original programming output officially began a decade ago, early breakouts like House of Cards or Orange is the New Black were licensed for streaming from partner companies as opposed to being fully owned originals. A few year s ago, the streaming giant shifted its strategy toward owning originals completely, though it still does partner on plenty of projects.In the coming weeks, there is likely to be lots of sleuthing about what’s not on Basic with Ads and why but sources who have been privvy to the process indicate, not surprisingly, that no marquee, top-tier titles are likely to be on that list.In recent months, as Netflix was in a six-month sprint to bring its ad offering to market, reports circulated about the rates Netflix is charging (said to be triple the going rate for streaming video, though execs declined to address pricing during the call). If it wanted to make significant asks of buyers in pursuit of a multi-billion-dollar opportunity, the company wouldn’t want any glaring holes. Since talks with ad buyers have already resulted in leaks about pricing and the launch date and other key details, if tentpole shows were going to be MIA, word about that surely would have surfaced as well.Because Basic with Ads is launching in 12 countries between November 1 to 10, Peters also noted that programming offerings will vary by territory.
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