Netflix's Ad-Supported Tier: A Potential Goldmine or User Base Killer? Netflix's advertising-supported tier reaches 1 million monthly
active users in the US, prompting analysts to reassess the potential of the ad tier as a significant revenue stream for the company.
Netflix's advertising-supported tier has reached 1 million monthly active users in the US, according to internal data seen by Bloomberg. This is a significant milestone for a service that was introduced with zero promotion
less than a year ago. However, the numbers are less impressive when compared to Netflix's total user base, as 1 million MAUs represent less than 1/2 of 1% of the company's viewership. Despite this, advertising is working for Netflix and Disney+. After a slow start, Netflix's advertising business has gained momentum, fulfilling its forecasted deliveries to advertisers, and attracting new
customers. The ad tier now accounts for about 20% of new sign-ups in the US, per Antenna, and most of the people signing up for the ad tier are new or lapsed customers. Netflix's ad tier was created to give price-conscious consumers an alternative, and it seems to be working. Analysts estimate the ad tier could bring in between 15 million and 30 million customers in the US, but that won't be
right away. The effectiveness of the ad tier is about to get a major test as Netflix cracks down on password sharing, which will force millions of people to stop using their friends' accounts. Despite the positive signs, the company still has a long way to go to catch up with advertising-supported offerings from Hulu and Peacock, which have a lot more users. However, the potential new
revenue from advertising and password sharing, paired with Netflix's more conservative spending on new shows, have prompted one of the biggest Netflix skeptics on Wall Street to change his tune. Going from "500%" growth in month one, to "50%" in month two, and "NOW meeting the projections promised advertisers," after not doing that out of the box, is not really the great news Netflix thinks
it is. To improve its ad tier, Netflix would do far better to secure the rights to run ads in all its programming and make its ad tier more attractive to more users, rather than relying on press releases to spin what has been an incredibly upside-down ad launch. It's clear that Netflix's advertising-supported tier has some catching up to do when compared to its competitors, but it's also
evident that the company is making strides in the right direction. The potential for new revenue from advertising and password sharing is substantial, and if Netflix can make its ad tier more appealing to a wider audience, it could potentially become a significant revenue stream for the company. However, it's important to note that advertising is not without its challenges, and Netflix will
need to tread carefully to avoid alienating its current user base. Many consumers pay a premium for ad-free streaming, and if Netflix were to inundate its programming with ads, it could risk losing subscribers. Overall, it's too early to say whether Netflix's ad tier will be a game-changer for the company, but it's clear that the service is gaining traction and attracting new customers. If
Netflix can continue to balance its advertising strategy with its existing business model, it could potentially become a major player in the advertising space. In the end, it's not just about how many monthly active users Netflix has on its ad tier, but rather how effectively it can use advertising to generate revenue without alienating its existing user base. Time will tell whether
Netflix's gamble on advertising will pay off, but for now, the company seems to be headed in the right direction.
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All the news you need today, in a format that isn't TL:DR, summarized for the busy executive.
DC and New Line's superhero film, Shazam! Fury of the Gods, had a disappointing opening weekend, grossing only $30.5 million domestically from 4,071 theaters. This is well behind the $53.5 million domestic opening of the first Shazam! in 2019. The film's opening is one of the worst starts for a major Hollywood
superhero film and one of the worst for a title in the DCEU, even including those released during the pandemic. Overseas, the film opened to just $35 million from 78 markets, including a poor performance in China with only $4.4 million. The movie had a production cost of at least $110 million before marketing. Shazam! Fury of the Gods received a ho-hum 54 percent score on Rotten Tomatoes, compared to 90 percent for the 2019 movie, and a more subdued B+ CinemaScore compared to an A for the first
film. A bank run occurred last week at Silicon Valley Bank (SVB), leading the government to shut down the bank and take control. Some investment managers and leaders in the venture capital, investment, and startup community communicated proactively and transparently about their potential exposure and the exposure of companies in their
portfolio. Others remained silent despite the risk of enormous disruptions to their employees, clients, vendors, and partners. Effective communication is crucial for every organization and leader, and best practices include not over-communicating good news, going deep with details, not being silent in a crisis, and being proactive. The crisis at SVB serves as a learning moment for the future. Amazon Prime has become an ecommerce giant with 60% of American households having a membership. While some businesses have come to rely on Amazon for easy order fulfillment, increased sales, and brand awareness, others have experienced detrimental effects on their bottom line due to shipping speed expectations and competitor pricing comparisons. Amazon has also been accused of replicating popular items and displaying its own products
at the top of search results. Two CPG brands, Broya and Chomps, provided insights into their experiences selling on Amazon. They both cited the daily traffic on Amazon and the simplicity of the Fulfillment by Amazon (FBA) model as compelling reasons to sell on the platform. However, drawbacks include the tight margins due to fulfillment and referral fees, and the lack of control over every moment of the customer experience. They advised running DTC and Amazon side by side, not in a silo, and to
nail down the numbers to make sure Amazon is a profitable channel. Meta, the company formerly known as Facebook, has launched "Meta Verified," its paid tier for Facebook and Instagram, in the US after previously releasing it in Australia and New Zealand. Users who subscribe to Verified for $11.99 per month on the web, or $14.99 on
mobile devices, will receive a blue verification badge similar to Twitter's blue subscribers and other perks like quick protection from impersonation and direct access to customer support. However, the US version of Verified won't provide increased visibility like it does in Australia and New Zealand. While the subscription may be a useful way to demonstrate credibility to followers, it comes at a higher cost compared to Twitter Blue for web, which costs $8 per month, and $11 for
smartphones. Six US senators have sponsored legislation to give President Joe Biden powers to ban TikTok in the country. Meanwhile, New Zealand has become the latest country to ban TikTok on government devices due to cybersecurity concerns, joining the US, Canada, Taiwan, several European countries, and more. In response, TikTok is
planning to bring a group of influencers to Washington DC for three days this week to hold a press conference on Capitol Hill in the hopes of preventing a forced sale of the company, which is one of the US government's conditions for avoiding an outright nationwide ban. A potential TikTok ban would directly affect brands, businesses, and influencers using the platform for marketing, highlighting the importance of not relying too heavily on any one platform and being prepared to apply learnings
and assets to other relevant channels. Brand designer and writer Jackson Greathouse Fall has gained over 96,000 Twitter followers in just a few weeks after using OpenAI’s GPT-4 to set up an affiliate marketing site for eco-friendly products. Fall asked the AI to turn $100 into as much money as possible, with the AI tool doing everything
else. Fall’s success has led to other GPT-4 users sharing their experiences with the hashtag #HustleGPT, and there is now a GitHub repository of others trying the “HustleGPT challenge.” The trend suggests that there are untapped audiences that would be interested in seeing how others interact with AI, as has been the case with video games. According to a new study by Insider Intelligence, in-store audiences for 13 leading brick-and-mortar retailers, including Walmart and Target, are 70% greater than their digital audiences. As a result, physical store retail media represents a significant business opportunity for retailers to capitalize on, despite massive investments into online retail media networks. More tech companies, such as Microsoft and Cooler Screens, and retailers like Walmart and Amazon are
introducing more solutions to help brands advertise in stores. However, it is still early days for many of these features, and in-store retail media offerings have yet to become a multi-billion dollar line of business, like digital retail media solutions have. The cost of rolling out in-store digital signage and other in-store placements such as self-checkout screens is the main barrier for retailers, as it can be significant for retailers, especially the ones that have multiple locations and
have stores that have limited existing in-store networking infrastructure. Dotdash Meredith, a publishing company, has joined hands with Pinterest to bring nearly 200 original videos to the social media platform. The year-long partnership will see Dotdash Meredith produce videos from its lifestyle, fashion, and food brands. These
include Better Homes & Gardens, Southern Living, Brides, Food & Wine, Serious Eats, Allrecipes, and Martha Stewart. Dotdash Meredith was already one of Pinterest’s largest content partners, with 20 profiles that garner over 90 million monthly views. The series starts with a video from Better Homes & Gardens and features tablescapes inspired by seasonal color palettes. The next series is "Wedding Dress 360," featuring the season’s most popular wedding apparel, from Brides. The
announcement comes less than two months after a similar deal between Pinterest and Condé Nast Entertainment. Marketers need to adapt and test new strategies to meet the changing needs of consumers. The last three years have raised the bar for marketers, as consumer expectations have changed, as has the best strategy for reaching them.
With the economy on the verge of a recession, consumers and marketers have less to spend, and the arrival of AI and machine learning has significantly altered what digital marketers can do at each stage of the customer journey. To stay ahead as new solutions emerge, marketers need to strive for authentic impact on social media, take search far and wide, explore fresh display channels, and integrate media and creative under one roof. It's important for marketers to anticipate what's
coming next in the ever-changing consumer behavior. Retailers are looking for new ways to provide the best experience for shoppers in-store and online while keeping their customers engaged and building loyalty during these fluctuating economic times. To meet these demands, brands are creating or expanding the "phygital" experience,
which is a mash-up of a brand’s digital and physical storefronts so they coexist. Large, well-known retailers like Nike and Starbucks are integrating technology throughout their store locations and providing personalized services to their customers. Other ways brands can delight consumers with phygital experiences include integrating app capabilities into the store experience, considering loyalty's role in product usage, and integrating Web3 and loyalty strategies. By meshing digital and
physical shopping, brands can differentiate their loyalty offerings and provide member-exclusive experiences while providing personalized, meaningful, and memorable interactions. Elon Musk has revealed that Twitter Blue subscribers will soon get priority ranking for their replies on the platform, which is part of his updated Twitter Blue
subscription plan. Improved tweet visibility was one of several elements of the plan, but Twitter has thus far struggled to implement new code changes without causing other issues. Musk has also reported that the platform’s ranking algorithm remains "overly complex and not fully understood internally," but the changes will be implemented for paying users, which may have unintended side effects. Indian D2C men's lifestyle brand, XYXX, has introduced a risk-free returns policy to encourage new customers who are reticent about ordering underwear online, as it cannot be returned after purchase. This follows consumer research showing that many were skeptical of buying underwear online, given the lack of return options. The offer is only available to first-time buyers, and the used garments will be donated to an
upcycling charity that repurposes waste and discarded clothing to make everyday items. The policy aims to attract new customers and instill confidence in the brand's product quality. |
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Meet Mary Gilbert, a trailblazer in the B2B marketing
industry with almost 30 years of experience under her belt. As the Chief Marketing Officer (CMO) of Folloze, a buyer experience platform that helps marketers build personal relationships at scale, Mary has become an expert in leading digital transformation and navigating the ever-changing market landscape. Throughout her career, Mary has worked with big-name global brands like Microsoft, Cisco, and Intel, as well as start-ups and scale-ups in diverse industries such as cybersecurity, healthcare,
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