Netflix likely not to show ads against kids content and new original movies

More details are beginning to emerge about Netflix’s planned ad-supported offering, with the latest reports indicating that some content will remain commercial-free.

According to Bloomberg, Netflix has told its commercial partners that it will not run advertising during its original kids programming. This is a combination of the company’s unsureness over how to work this, while some studios have expressly forbade Netflix from running commercials alongside their children’s content.

The report also notes that the streamer has decided that its original movies will stay ad-free, at least for an as-yet undecided period following their launch. This may also help to inflate streaming numbers for Netflix’s new movies, should the streamer make it known that new movies will be shown ad-free for an initial window.

While the ad-supported tier of Netflix was initially slated for a late-2022 launch in the US, Bloomberg’s sources said that this has now been pushed back to early 2023 with planning for the offering still in the early stages. Part of the difficulty is to do with the fact that Netflix will have to renegotiate its contracts with studios and distributors in order to insert advertising, with the report also saying that it will pay between 10-15% of the current value of its deals with the likes of Paramount and Sony in order to secure the rights. 

It has been estimated that Netflix could generate between US3-4 billion per year via ad sales, immediately making it one of the biggest players in the online video market. 

Earlier this summer, Netflix signed up Microsoft as its adtech and sales partner. The company’s COO Greg Peters praised Microsoft’s “​​proven ability to support all our advertising needs as we work together to build a new ad-supported offering” and said that the Windows-maker “offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members.”

Netflix’s biggest streaming rival Disney, which recently overtook it as the world’s largest streaming operator, will launch its ad-supported version of Disney+ in the US on December 8, and has given it a US$7.99 per month price tag. The addition of advertising on Disney+ is relatively simple from a contractual basis, as the streamer exclusively houses content that Disney owns, and this has allowed the company to move swiftly with its integration.