Netflix Ad Tier Hits 70 Million

Plus, YouTube Ads Rival Broadcast Revenue

November 19, 2024

Welcome to The TV Room. Your weekly digest of television, streaming, and digital media insights that matter.

This week we're covering:

  • 🎟️ 70 Million Join Netflix’s Ad Tier

  • 📺️ YouTube Ads Rival Broadcast Revenue

  • 🎥 Creative Spotlight: Amazon - “Midnight Opus”

  • 📹️ Google Launched Vids

70 Million Users Flock to Netflix’s Ad Tier

Netflix's once-controversial move into advertising has paid off big time. The streaming giant announced its ad-supported tier has reached 70 million monthly active users globally, nearly doubling from 40 million in May.

The cheaper plan, priced at $6.99 in the U.S. compared to $15.49 for the ad-free version, now accounts for over 50% of all new Netflix sign-ups in regions where it's available. To put that growth in perspective, Netflix's ad tier alone now has more users than the total subscriber bases of competitors like Apple TV+ (25 million), Peacock (34 million), and Hulu (51.1 million).

The rapid adoption has attracted major advertisers. Netflix has already sold out all available ad inventory for its upcoming Christmas Day NFL games, with FanDuel signed as the exclusive pregame betting partner and Verizon sponsoring pre-kickoff segments.

Looking ahead, Netflix is making strategic moves to strengthen its ad business:

  • Set to roll out proprietary ad tech globally in 2025, starting with Canada

  • Secured a partnership with Nielsen for live NFL game ratings

  • Expanding measurement capabilities through partnerships

  • Ready to enable programmatic guaranteed ad buying in key markets

While Netflix doesn't expect the ad tier to become a primary growth driver until 2026, the rapid user adoption suggests it could become a major revenue stream sooner. The company's overall subscriber base now tops 282.7 million globally.

The success has validated Netflix's pivot to advertising after years of resistance. As Amy Reinhard, Netflix's president of advertising noted, they continue to "see steady progress across all countries' member bases", proving the streaming giants have auspiciously evolved their business model.

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TV Industry Updates

  • TV still works: Advertising drives web traffic, with first-time advertisers seeing up to 42% more visitors.

  • Fox dominates election: Fox News led election night coverage with 9.8 million viewers, outperforming traditional networks and cable news competitors.

  • Measurement evolution: TV measurement is shifting from sample-based to big data systems, with identity resolution emerging as the key challenge.

  • Paramount+ profits: Paramount's streaming division achieves profitability for the second straight quarter after DTC revenue hit $1.8 billion in Q3.

  • YouTube's TV takeover: YouTube ad revenue could soon match the entire broadcast industry's 2024 numbers, reaching $8.9 billion in Q3 alone.

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Creative Spotlight: Amazon - “Midnight Opus”

Amazon's 2024 holiday campaign "Midnight Opus," told a heartwarming story of theater colleagues organizing a special moment for their janitor, set to the classic "What the World Needs Now Is Love."

The Details:

  • Created in-house, the 90-second spot was directed by Wayne McClammy, known for Amazon's "Joy Ride" and "Saving Sawyer."

  • Launched in early November across Europe, with US and Canada releases set for November 18.

  • Includes 30 and 60-second versions for TV, VOD, online, cinema, and social media.

  • Focuses on small acts of kindness, showing theater workers creating a spotlight moment for their janitor.

What We Loved: The ad captured the joy of unexpected kindness, using a theater setting and classic soundtrack to deliver a heartfelt holiday message that stood apart from typical retail themes.

Marketing Mix

  • Budget-friendly content: Marketing budgets dropped 56.8% from 2023 to 2024, pushing teams to rethink strategies.

  • Push vs pull: Marketers are succeeding by blending push marketing for immediate sales with pull marketing to build lasting brand value.

  • Video for all: Google launched Vids, a new Workspace app that helps teams create engaging video content without needing professional video skills.

  • Agency acquisition: Marketing consultancy R3 was acquired by MediaSense, expanding their global media advisory capabilities.

  • Customer focus: Studies show that 84% of organizations reported increased revenue after improving customer experiences.

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