“Broad Swath” Of Advertisers Joining Netflix’s Ad-Supported Tier

“Broad Swath” Of Advertisers Joining Netflix’s Ad-Supported Tier
Tom Fogden
By Tom Fogden
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Netflix’s president of worldwide advertising, Jeremi Gorman, said that despite challenges, the company’s new ad-supported tier was performing well and a range of brands were lining up to join the service.

Speaking at the Consumer Electronics Show (CES) in Las Vegas, Gorman told a panel at Variety’s Entertainment Summit that the company was pleased with its progress.

“It’s really across the board,” said Gorman.

“We’re seeing CPG companies, luxury companies, automotive companies…[and] retail. We’re seeing a broad swath… and I think we’ll continue to see that,” she added.

Gorman also discussed one of the primary complaints by advertisers, namely the high CPM prices.

“From a supply-demand perspective, the premium CPMs are reflective of two things: one is that we just couldn’t take that many advertisers. We certainly didn’t want to disappoint anybody. Then secondarily, the premium content environment in which the ads run I think warrants a high CPM,” she explained.

“I think we’re certainly humble enough to very much understand we’re top of market, and in addition to that, the market will more or less dictate to us what are reasonable CPMs.”

A broader issue for Netflix, however, has been licensing restrictions. As the service was not initially advertiser supported, many of its content deal did not include video on demand ad rights. In fact, the service was unable to run ads against some of its own Netflix Originals series. Gorman, however, was keen to demonstrate the company’s progress on rights.

“That’s progressing, as we speak, day by day. We’re renegotiating deals we made a long time ago,” she said, adding that the “vast majority” of content that people watch regularly — around 85 per cent to 95 per cent of content — is available in the ad-supported tier.

However, Gorman was unable to discuss the financials of the new ad supported tier. She did say that the company was “pleased with the growth” it was seeing.

Currently, the ad-supported tier is only available in Australia, the US, UK, France, Germany, Spain, Italy, Japan, Korea, Brazil, Canada, and Mexico.

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