Netflix is moving the timeline for the debut of its cheaper, ad-supported plan to November – to get out ahead of the December 8 launch of the ad-supported Disney+ tier.
In July, Netflix told investors that it aims to launch the ad-supported plan “in early 2023,” according to Variety. But now, Netflix’s commercials will air Nov. 1 in several countries, including the U.S., Canada, the U.K., France and Germany, according to industry sources briefed on the streamer’s plans. That would be just over a month before Disney+ Basic, priced at $7.99/month, hits the U.S. market.
Netflix declined to comment. “We are still in the early days of deciding how to launch a lower priced tier supported by ads and no final decisions have been made,” a company representative said.
Netflix launches commercials from Nov. 1
Sources have confirmed the new November 1 launch date, which was previously reported by the Wall Street Journal. Netflix and its exclusive ad partner, Microsoft, have asked ad buyers to submit initial bids next week with a “CPM of $65” – the cost per thousand views – meaning the streaming giant is open to negotiating ad rates. That’s well above industry CPMs of under $20. Sources speculate that Netflix’s request for proposals from ad buyers will act as a bidding war, with the company looking to see what the market will bear.
As for the initial $65 CPM that Netflix and Microsoft offered, one ad buyer said, “I guess they won’t get that.” “At anything over $20 [CPM], the feeling is, ‘Let other advertisers get into that group first.'”
Netflix is asking for a minimum commitment of $10 million in annual ad spending from agencies right now, according to a source. The company wants to lock in ad buys until Sept. 30 to meet its Nov. 1 launch date. Netflix has told ad buyers that it expects to have about 500,000 customers on its sustained ad plan by the end of 2022.
To run its ad business, Netflix recently took Snap’s two top advertising executives – chief business officer Jeremi Gorman and vice president of sales Peter Naylor – under its wing.