Home Ad Exchange News Netflix Is Trying To Force Ads On Subscribers; The VC-Backed Busts

Netflix Is Trying To Force Ads On Subscribers; The VC-Backed Busts

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Comic: Netflix Headquarters

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Just Watch The Ads, Please

Netflix nixed its $9.99 per month Basic plan in the US and UK.

It’s the streaming giant’s cheapest ad-free offering, which it likewise removed in Canada only a few weeks ago. Turns out, Netflix has also been hiding the Basic plan on its website, requiring users to click a “see all plans” dropdown menu to see it, The Verge reports.

Now, new or returning subscribers have three plans to choose from: Basic with Ads for $6.99 per month, Standard (the cheaper ad-free option) for $15.49 or Premium for $19.99.

Scrapping the Basic plan is a clear indicator that Netflix wants to funnel more subscribers  to the ad-supported option, and further supports the case that a low subscription with ads means more net revenue per user.

Netflix held off on ads for a long time partly because it never worked with them before, so brands had no pressure to bring to bear. (Disney, on the other hand, must placate advertiser clients while its TV audience dwindles.) But shareholders have plenty of leverage over Netflix and a reason to want more ads.

Pyrrhic Victory Over VCs

Tim Steiner, founder and CEO of Ocado Group, an online grocery provider, had sharp words for venture capitalists that backed a whole category of quick-delivery startups (Getir, Gorillas, JOKR and the list goes on) with billions of dollars spent in waste.

Media was “crazy expensive” last year, Steiner told an investor this week when asked about the pressure on customer acquisition by VC-backed rivals. “Double the same amount of voice that you had before because of all that stupid, if I’m allowed to say that now, VC money that was chasing the q-commerce world at, like, ridiculous levels.” (“Q-commerce” meaning “quick commerce,” for companies chasing 15-minute delivery times.)

“But as you can imagine, just trying to do your normal business was hard because they were buying all the space,” he said.

Two years ago, that wave of VC funding propelled Getir and Gorillas to supposedly larger revenue than Ocado, Steiner said.

But they moved heavily discounted items at a loss while adding one-time-only customers.

Now Ocado is 20x bigger than Getir and Gorillas combined in the UK market.

Closed-Market Programmatic

Bloomberg Media shut off its open-market programmatic sales at the beginning of 2023.

Six months after flipping the switch, there are clever-cut pros to having made the decisions. Viewability metrics and CPMs are up 20%, Chief Digital Officer Julia Beizer tells Adweek.

Clickthrough rates have quadrupled; site elements load faster; and the former ad inventory is now used to push personalized links or sell in-house subscription packages.

Buuuuuuut, ad revenue is down, and Bloomberg still has a lot of work to do to recoup that lost revenue.

The changes are philosophical, too, so Bloomberg doesn’t need to prove beyond a doubt that it can make more pennies selling fewer impressions at a higher CPM.

“If you look at your website like a math equation, you lose the magic of what readers are coming for,” Beizer says. “We know readers are coming for journalism first, so monetizing that through ads and subscriptions has to be our second priority.”

But Wait, There’s More!

A surge of harmful content on Twitter is turning off advertisers. [Bloomberg]

Studios need a streaming media metric to end the writers’ and actors’ strikes. [Variety]

So far, Netflix’s ad-supported tier has 1.5 million subscribers. [The Information]

Instagram found not liable for infringement over embedded images. [TorrentFreak]

Raptive weighs in on the debate over AI content and safeguards for creators and publishers. [release]

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