Netflix With Ads
You may have heard that Netflix will be rolling out a subscription tier that includes advertising. Netflix has always held on to being commercial-free as one of the major benefits to subscribers. However, with subscriber growth dwindling, they have begun to consider other revenue streams such as advertising. They have also found that customers are interested in an option that includes advertising for a $5 fee reduction. They expect to have 40 million such users by the end of 2023.
You Want How Much?
At launch, Netflix plans to charge advertisers $65 for every 1,000 impressions, or cost per thousand (CPM). This is close to triple the CPM for prime-time network television ($22).
How can Netflix command these rates? An impression is an impression, right? Here is what Netflix has figured out, and how you can apply it to the advertising you are currently executing for your business.
When measuring impressions for network television, the measurement is of how many people are watching the show, not necessarily the commercials. As you can see from this chart, and probably experience yourself, people don’t always hang around for commercial breaks. It’s a good time to make a run to the refrigerator or see what else is on another channel.