Netflix Seeking Top Dollar From Advertisers

Netflix Inc. is looking to charge brands premium prices to advertise on its coming ad-supported platform, according to some ad buyers, a sign the streaming giant is expecting strong interest from companies that have long looked to reach its audience.

Executives from Netflix and Microsoft Corp., which is supplying the technology to facilitate the placement of video ads on Netflix, met with some ad buyers last week, some of the buyers said. Netflix is seeking to charge advertisers roughly $65 for reaching 1,000 viewers, a measure known as CPM, or cost per thousand, according to The Wall Street Journal.

That is substantially higher than most other streaming platforms, the buyers said.

Netflix has been racing to get a lower-price, ad-supported tier off the ground as it looks for new ways to generate revenue and attract more cost-conscious users. Since announcing its openness to advertising in April—a significant change for a company that has long sold itself as a commercial-free haven—Netflix has made multiple moves, including choosing Microsoft to help launch the service and hiring two Snap Inc. executives to lead its advertising push.

Some of the ad buyers said they were told by Netflix that an ad-supported version would be launched on Nov. 1. In July, Netflix said it was targeting an early 2023 launch for the new tier.

Netflix wants to cap the amount any brand can spend annually on its platform at $20 million, in order to ensure that no brand advertises too much on the service and people end up seeing the same ad too often, some of the buyers said.

The ad buyers said they were surprised Netflix would seek such a steep price for ads on an untested platform. However, they said, it isn’t unusual for new entrants in the streaming space to seek high prices and then later negotiate them lower.