Netflix Talking Ad Partnership With Google For Streaming Ad Option: CNBC
- by Wayne Friedman , June 22, 2022
Google now joins the list of companies being contacted as possible advertising partners for Netflix’s low-cost ad-option of the subscription video-on-demand service, according to a CNBC report.
A Netflix representative responding to Television News Daily said: "We are still in the early days of deciding how to launch a lower priced, ad supported option and no decisions have been made. So this is all just speculation at this point."Other companies reportedly contacted by Netflix include Roku and Comcast Corp.
Netflix has said it would be looking into offering a low-cost advertising option to consumers, possibly by the end of 2022.
For years, Netflix has resisted any changes to its all-subscription, no advertising, video-on-demand service. But now as the streaming and CTV business is maturing and subscriber growth for Netflix and others has slowed down, the advertising option is now on the table.
Virtually all major brand streaming platforms now have an advertising option to go along with their ad-free, subscription services. In March Disney+ said it would launch an advertising-supported option to start later this year.
One recent estimate from MoffettNathanson Research projected that Netflix could earn $1.5 billion in ad revenue by 2024. Earlier, media agency Havas projected Netflix could hit between $2 billion and $3 billion in yearly advertising revenues.
Analysis by Jason Kanefsky, managing partner of marketplace intelligence, said this could come from $100 to $150 per year in advertising revenue per subscriber, and that 20% of the 100 million North America subscribers -- which include password-sharing homes -- could move to a Netflix advertising video-on-demand (AVOD) platform.
On Thursday, Ted Sarandos, co-chief executive officer of Netflix, is scheduled to appear on a panel at the Cannes Lions festival. Possible discussion points could include advertising on Netflix, according to analysts.
This story has been updated.
About 5 years ago, I predicted Netflix would offer a lower subscription tier, subsidized with advertising. This is big news for advertisers who will have the best interest segments possible to align to their brand personalities. I hope Netflix is looking to Google or others for more than being a publisher in their networks as Netflix audiences will stand on their own and possibly exceed in brand buliding value what Google audiences can offer.