LONDON, UK — If anyone was in any doubt that Netflix’s ad-supported tier had finally arrived, they just had to attend The Future of TV Advertising Global forum, in London, December 2022.
There, Netflix’s president of worldwide advertising Jeremi Gorman introduced the scheme to ad buyers.
In attendance, Dave Morgan, Founder & CEO, Simulmedia, liked what he heard.
Tough economy
“I’ve got to believe that they’ll be over over $2 billion in 2025, a billion and a half to 2 billion probably,” Morgan told Beet.TV, after hearing Gorman on stage.
“It’ll have premium pricing and I think there’s going to be a big uptake on audiences taking an ad-supported tier, particularly with a tough economy over the next couple years.”
Launched in 12 markets, Netflix Basic supports quality up to 720p, a single device and access to games, with advertising support at a lower pricepoint. Netflix says:
“Unlike our other ad-free plans, ads will be shown before or during most TV shows and movies. Some movies and TV shows will not be available due to licensing restrictions, and downloads are not included.”
Uniting worlds
Morgan thinks Netflix’s ad play could help the worlds of TV and digital media, which have often remained separate.
“I do think there’s a big disruptive opportunity for Netflix,” he says. “All too often everyone’s been trying to solve the new problems with our old solution.
“TV has not innovated out of formats and breaks in the way they do programming. Digital has gotten a bit old too.
“… It seems to me Netflix’s opportunity (is), can they bring the best of digital and the best of TV together in a way that converges without collision?”
Going long
Netflix won’t necessarily be going up against digital-native platforms for ad dollars.
“Netflix presents probably a different opportunity than Google’s YouTube, for example, where it’s more short-form format, a lot more smaller creators,” Morgan reckons.
“I think that Netflix will give more gravitas to the long-form premium video approach of the large broadcasters, rather than a TikTok approach.”
You’re watching Beet.TV’s coverage of The Future of TV Advertising Global forum, filmed in London, December 2022. For more videos from this series, please visit this page.