Netflix Upfronts: Big on News Content, Choice and Commercial
Jun 12, 2024
CONTENT.
The standout announcement from Netflix was their refreshed commitment to make in-roads into Standalone Event programming. After the successes of Roast of Tom Brady, Drive to Survive and Full Swing, Netflix are doubling down in arguably the most cluttered and lucrative sports – NFL. They have signed the rights to international live broadcast for three years of Christmas NFL games, and at $150m USD per game and at least 4 games included in the package, this isn’t small change.
This commitment indicates Netflix’s evolution – from one-off sports events (EG: the upcoming Tyson vs Paul Boxing match) to partnering with a major sporting code – live streamed. Whilst they do not own the viewing rights of the NFL as a sporting code, as the likes of Fox, CBS, NBC, ABC,ESPN, Amazon and a multitude of others all have NFL rights to certain games, it is clear that Netflix are going to be testing the demand and the commercial opportunity in having major rights in a niche genre, and the advertising that comes from the new depth of involvement.
Aside from in-game/event programme integrations and promotions, Netflix have opportunity to carve out a bespoke customer focused offering that could reduce churn, offer increased commercial opportunity and subsequent content expansion. This has been done before across Broadcast TV; we’ve all heard the term “the home of cricket…” the question is, what could Netflix be the next home of?
CHOICE.
Netflix is revolutionizing its advertising approach by bringing ad serving technology in-house. This strategic shift allows Netflix to offer advertisers more choice, flexibility and advanced targeting options, leveraging top-tier technologies for insights and independent measurement. The details of Netflix’s development of this technology remain under wraps, but it’s rumoured to focus on immersive brand advertising experiences that synergise storytelling and genre, creating a cohesive narrative across a series or season.
Furthermore, Microsoft will maintain advertising rights, now bolstered by partnerships with Google through DV360, Magnite, and TheTradeDesk. This expansion is a tactical move to diversify options in markets where Microsoft’s Xandr technology has limitations, such as Australia. Although Xandr is competent, it’s not without its flaws, often described as cumbersome. The inclusion of TheTradeDesk, Magnite, and Google enriches the advertising ecosystem, offering agencies and clients seamless access to Netflix’s advertising inventory. This, combined with significant integrations with verification and measurement giants like DoubleVerify, IAS, and Nielsen, signifies a move towards a more integrated and varied advertising landscape.
The combination of these two points firmly negates the issues that advertisers have voiced; that targeting, and measurement is limited, and sends a message to the market that Netflix are open for client ad dollars and wanting to respond to industry concerns and feedback.
WHAT DOES THIS MEAN FOR US.
Canada is slated to be the first to test the Netflix Ad Platform with the US coming into play Q2 2025. AU will likely by 2026.
Google/TTD etc comes to the US, Canda, Mexico and Brazil markets in the next quarter. If all goes well, we can expect Q4 2024 at the earliest for APAC access.
COMMERCIAL.
Netflix’s strategy to attract advertising clients is subtly hinted at, though not explicitly stated. Regardless of the scope of their in-house adserver, Netflix will likely employ a strategy the
not only manage commercial yields but also leverage insights to enhance and grow client usage.
The proposed access points—Netflix’s own Ad Service for premium data insights and platforms like Google/TTD/MSFT/Magnite for varying levels of targeting and measurement—suggest a sophisticated model akin to traditional TV marketplaces. This reflects Netflix’s ambition to become an integral part of the television landscape, aligning with established industry practices.
In summary, Netflix has firmly established itself as a formidable force in the U.S. market and is actively pursuing expansion strategies. Like many digital enterprises, they are advancing by leveraging their extensive data to test, evaluate, and enhance their growth tactics incrementally. Netflix’s momentum can be likened to an unstoppable freight train—approaching gradually, yet inexorably.
