To say that Netflix’s launch of its lower-priced, advertising-supported option has not gone well would be quite an understatement.
The launch, which happened in early November, was meant to provide a more affordable option for prospective customers, in exchange for adding commercial breaks to the show.
Obviously, the plan for the streaming service was to recoup any potential losses with ad revenue through the commercials.
Well, that plan seems to have backfired, according to Digiday.
Given that Netflix has fallen woefully short of ad-supported viewership guarantees made to advertisers, the streaming service is allowing advertisers to take their money back for ads that have not yet run, multiple agency executives told Digiday, as reported Thursday.
In certain cases, Netflix has come up 20 percent short of the expected audience.
“They can’t deliver. They don’t have enough inventory to deliver. So they’re literally giving the money back,” one executive said, according to Digiday.
“Pacing was well below expectations, so some advertisers pushed for money back now so we could spend it in the critical holiday time period, and they deserve credit that, in the vain of partnership, [they] have agreed,” a second executive said.
Not all advertisers have taken money back.
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“There have been several ways they have approached missing delivery targets, and clients want resolution in different ways. Not everyone wants cash back at the end of a fiscal year,” yet another executive told Digiday.
While it may be commendable for Netflix to offer this advertising refund, it doesn’t make the situation any less humiliating.
The massive streaming service, which began as a DVD delivery service, has been fraught with issues as of late, some of which are beyond its control.
Issues such as increased competition because of the proliferation of streaming services, with many customers having to pick and choose which to keep; the loss of rights to various popular shows (“The Office” and “Friends” once made up over 11 percent of all Netflix views, and both have since left the platform); and people just generally going back out into the world post-COVID, have hurt the streaming behemoth.
But Netflix has also suffered countless self-inflicted wounds as well.
Chief among those is the company’s embrace of far-left “wokism” that produced asinine projects like “Antiracist Baby” (ultimately canceled) and “Cuties,” the latter of which drew swift condemnation for depicting minors in an unfathomably lewd manner.
As Variety reported in 2020, the “Cuties” backlash increased cancellations by a whopping eightfold.
Other woke programming included “Q-Force,” a cartoon about LGBT spies; “Dear White People,” a series accused of promoting anti-white racism; and “He’s Expecting,” the synopsis of which read, “When a successful ad executive who’s got it all figured out becomes pregnant, he’s forced to confront social inequities he’d never considered before.”
Netflix still appears to be in a sound enough financial state to ask advertisers for a higher cost per impression than even its most prolific competitors.
According to Digiday, the streaming company asks advertisers for $55 per thousand impressions, a 10 percent bump over what Disney seeks to advertise on Disney+.
