Netflix plans on introducing a new ad-based tier in November, according to a new report by Variety. It seems that the streaming giant has moved up the launch date of its new tier from December to November to beat Disney+ to the punch. Disney+ will also be launching an ad tier in December this year.
Price of Netflix’s New Ad Tier
The new ad tier being introduced by Netflix will go live starting in November in multiple countries, including the US, Canada, UK, France, and Germany according to the report. The new tier is expected to be priced around $7-9 per month. The pricing has not been officially announced yet but should be around the $8 that Disney+ is offering.
A Netflix spokesperson said:
“We are still in the early days of deciding how to launch a lower-priced, ad-supported tier and no decisions have been made.”
The report also says that Netflix will be working with a new advertising partner, Microsoft, for the new ad tier. Both companies are still in talks with advertisers about the rates for now, but the offered rate is $65 CPM, or cost per one thousand views. That is considerably higher than the current industry rate of $20 CPM.
It is not likely that Netflix will get the $65 CPM just because talks are starting with that figure. According to Variety’s sources, this price will be negotiated down to more realistic rates.
The report also added that Netflix is asking advertisers to spend $10 million at least, and it needs ads to be in place by the end of September. The company is telling ad buyers that 500.000 customers are expected by the end of this year.
Finally, the first wave of ads on Netflix will not be consumer targeted. And as for the ad frequency, the company is planning on four minutes of ads per hour of streaming for shows. For movies though, the ads will play before the movie starts.