According to DigiDay, Netflix is returning funds to advertisers. “They can’t deliver. They don’t have enough inventory to deliver. So they’re literally giving the money back,” one agency executive told the publication. A Netflix spokesperson did not immediately respond to IndieWire’s request for comment on this story. Netflix’s initial ad deals were pay-on-delivery, which means if they don’t deliver the eyeballs, the advertiser doesn’t pay. Traditional television usually offers a make-good at a future date, but neither is a perfect system. It should be noted that, as DigiDay pointed out, Netflix began pitching advertisers and agencies before it hired Jeremi Gorman and Peter Naylor to run its AVOD (advertising-supported video on demand) business.
Some advertisers didn’t want cash back at the end of the year and elected to have the monies roll over into early 2023. Others have such seasonal businesses that the holiday time was the only time it made sense to advertise. DigiDay sources viewed the Netflix shortfall of AVOD opportunity as a byproduct of how swiftly the company created, sold (with Microsoft’s help!), and rolled out its “Basic with Ads” plan. “I think we knew there was going to be a supply issue, and they can only accommodate so much money,” another agency executive said. That said, the agency executives believe Netflix failed to market its ad-supported tier properly. If “Basic with Ads” had more customers, it could show more ads. Netflix is “still seeking ad deals for 2023,” DigiDay wrote, but they might be cooling it on price. In the early days of Netflix’s negotiations, the streamer asked for an industry-leading $65 per thousand impressions. These days, it’s more like $55 — but like NFLX’s per-share price, that could drop again. Read the DigiDay story here. One week ago today, equity analysts at Wells Fargo upgraded NFLX to a “Buy” and raised their target price from $300 to $400. Last week was also the week “Wednesday” became Netflix’s third-ever show to cross 1 billion hours streamed within its first 28 days. The “Addams Family” spinoff starring Jenna Ortega needed only 19 days to amass 1.02 billion hours. Only fellow English-language TV series “Stranger Things 4” and Korean-language sensation “Squid Game” were watched more within their first four weeks. “Wednesday” still has nine days left to attempt to catch or pass them. Sign Up: Stay on top of the latest breaking film and TV news! Sign up for our Email Newsletters here.
