Netflix Will Face Hurdles in Courting Advertisers, But Biz Abuzz About Streamer’s New Model

variety.com:

Brian Steinberg Senior TV EditorNetflix has held Madison Avenue at arm’s length for years. Now, the popular streamer wants to draw the advertising industry in a tighter embrace.After years of resisting the prospect of running commercials, Netflix signaled on Tuesday that it’s ready to consider launching an ad-supported tier of its service, which has lured traditional TV viewers with ad-free series like “Stranger Things” and “Ozark” and commercial-free movies like “Don’t Look Up.” Figuring out an ad strategy could take months, said Reed Hastings, Netflix’s co-CEO, during an investor meeting, “but think of us as quite open to offering even lower prices with advertising as a consumer choice.”The company announced its intention to court commercials just weeks before the start of the industry’s annual “upfront” ad sales season, when U.S.

TV networks try to sell the bulk of their commercial inventory for the next programming cycle. Few buyers expect Netflix to vie suddenly for ad dollars with Disney, Fox, NBCUniversal, Warner Bros.

Discovery and Paramount Global. “It would be a very quick turn,” says Mike Law, CEO of Carat the large media-buying unit owned by Dentsu. “They have a significant footprint of users, so it’s not like they’re one of the newcomers, where they haven’t formed a sizable subscriber base.

They have a huge amount of reach, so that’s a positive. But what does their ad model look like? How much audience data are they willing to share?