NBCUniversal competes with Google to help Netflix develop an ad-supported category

Netflix, which hopes to increase revenue by selling ads around its shows, is still in the early stages of developing a strategy and has explored a range of linkages in recent weeks.

People familiar with the matter said the partnership with NBCUniversal will likely be exclusive. People said Comcast’s video advertising unit, FreeWheel, will provide the technology to help display ads, while NBCUniversal’s ad sales team will help sell ads in the US and Europe.

They said that the partnership with NBCUniversal will likely involve revenue sharing, and one of the issues may be whether Netflix will guarantee a certain amount of revenue. Linda Yacarino, Head of Global Advertising and Partnerships for NBCUniversal, would be a major player in such a partnership.

People close to the discussions said Google is rolling out its own ad-serving technology and video experience through YouTube and its online channel package, YouTube TV. They said Google already has a business relationship with Netflix, which is a customer of its ad buying tools. It is likely that Google will also seek an exclusive arrangement.

“We are still in the early days of deciding how to launch a low-priced, ad-supported option and no decisions have been made,” a Netflix representative said.

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People familiar with the matter said he also had early talks with Netflix about ad partnerships. the information Previously mentioned That Netflix spoke to Comcast and Roku about getting help with technical infrastructure or ad sales.

In April, when Netflix reported its first quarterly subscriber loss in more than a decade, the company said It will move towards putting advertisements at its servicesomething that co-CEO Reed Hastings has long resisted.

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The shift in strategy was a sign that competition from rival streaming services, and the end of the pandemic-fueled growth spurt, were weighing on Netflix and forcing it to rethink its approach. The ad-supported tier will be affordable and can help increase revenue and subscriptions.

Forming partnerships with big competitors like Google or NBCUniversal, and outsourcing tech infrastructure and ad sales, can help Netflix move faster to bring an ad-supported version of its service to market. Several ad industry executives estimated that it would take at least a year for Netflix to spread ads across the service globally, though others said Netflix could start testing ads in some markets much sooner.

Netflix’s main competitors each have experience supporting other companies’ ad sales efforts. NBCUniversal has been the exclusive distributor of Apple News and Apple Stocks ads in the US since 2017, and recently said it has expanded its relationship to include the UK. NBCUniversal will give Netflix open access to its ad technology partners, one person familiar with this said. He said it.

Google is starting to help

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which was a FreeWheel customer, was running ads across video, smartphones and desktops in late 2018.

People familiar with the matter said Netflix is ​​also exploring potential relationships with ad technology companies that could drive demand from advertisers for automated placements on the streaming service.

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It is one of the ad technology companies that has discussed a partnership with Netflix in this area, they said. A person familiar with the situation said DoubleVerify, a company that helps advertisers measure campaign performance, also spoke to Netflix.

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Advertising industry executives who have had discussions with Netflix say the company has not provided details of its plans, such as how many ads the company will display per hour of programming and whether the company aims to offer targeted, personalized ads or focus primarily on the ability of advertisers to reach its user base. of 222 million subscribers.

Netflix’s subscribers fell for the first time in nearly a decade, causing its stock to post its worst one-day percentage drop since 2004. WSJ’s Joe Flint walks us through three strategies the company might try to continue growing, and what they could mean Changes to other banners. Correction: An earlier version of this caption stated that Netflix stock fell to its lowest level since 2004.

write to Sarah Cross at [email protected], Patience Haggin at [email protected] and Lillian Rizzo at [email protected]

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