New ad products as subscribers and prices rise at Netflix

Streaming service Netflix reported the number of paid members rose almost 11% year on year in Q3, while also announcing price increases for some services in certain countries and highlighting advertising potential.

By the numbers 

• Netflix registered 247 million paid members globally in Q3 (up 10.8% year on year), with almost 9 million net additions, in a sign that its crackdown on password sharing is working.
• Ads plan memberships were up 70% quarter on quarter; sign-ups to ads plans accounted for 30% of all sign-ups in the 12 countries offering that option.
• The prices of its Basic and Premium subscriptions in the UK, US and France will increase (Ads and Standard plans remain unchanged) .

The ad experience 

• Ad revenue has yet to make a material contribution to the business; on an earnings call, however, CEO Greg Peters talked of a $180bn opportunity and “having a really strong foundation to work with”. 
• “Scale is the number one priority,” he added. “Second is delivering features and products that advertisers want” – with measurement a prominent part of that process. 
• Netflix has recently launched title sponsorships and will next year offer a new ad product aimed at binge viewers: “if you’re watching a few episodes in a row you’ll be served a hero spot that says ‘the next episode is commercial free, made possible by XX brand’.”
• It’s also working with Microsoft to offer more ways to buy ads programmatically. 

New product areas

• Physical flagship destinations are coming. Netflix House aims to combine fresh, new live experiences, based on hit shows, as well as food and retail.
• Games: “We’ve got ambitious plans there, we want to really grow our engagement by many multiples of where it is today over the next handful of years.”

Key quote

“On the advertiser side, we’re working with brands to create formats they will value, in particular the ability to connect with highly conversational and culturally relevant programming” – Greg Peters, CEO, Netflix.

Sourced from Netflix