Netflix recruits advertisers and launches new resources 'Popular Series Broadcast Sponsorship' and 'Holiday Broadcast Sponsorship'

According to news on May 19, Netflix announced that its low-price advertising-included membership package has attracted 5 million monthly active users six months after its launch. This news brought obvious stimulation to Netflix's stock price, which rose by 9.22% that day, the largest single-day increase in the past seven months.

According to data released by Netflix, this advertising combination has attracted many new users, especially younger users. A quarter of new subscribers have opted for an ad package, and the median age of lower-priced members, ages 20 to 34, is younger than traditional TV subscribers.

Netflix took the lead in launching a $6.99 advertising subscription package in the United States last November, which is 30% cheaper than the basic package. Initially, the limitation of this advertising package is that it can only watch video content in 720P resolution and can only be used on one device. However, in April this year, Netflix upgraded its advertising package to support 1080P resolution and simultaneous viewing on two devices, and launched it in 12 countries including the United Kingdom, France, Germany, Italy, Brazil, Canada and Japan.

The new low-price package launched by Netflix has significantly brought about the effect of adding new users and attracting more young viewers. In order to further expand its advertising business, Netflix has also begun to recruit advertisers and will launch two advertising resources: "Popular Series Broadcast Sponsorship" and "Holiday Broadcast Sponsorship".

Company co-CEO Ted Sarandos said that Netflix is ​​also considering launching a long advertising model, which will play ads for up to 30 minutes when the user presses the pause button. He noted that the idea is still in its preliminary stages and will not be implemented in the short term.

Netflix’s low-price package model is inspired by competitor Hulu. Hulu has launched two packages in the US, priced at $7.99 (with ads) and $14.99 (ad-free) respectively. Data released by Disney shows that Hulu’s advertising package accounts for 50% of its subscription scale.

Netflix CFO Spencer Newman said in an earnings call at the beginning of the year that he believed Netflix's advertising revenue would grow to at least $3-4 billion and is expected to surpass Hulu's advertising business within a few years. .

Netflix needs to launch low-priced plans to increase the number of paying users, which can be seen from the company's performance data. In the first quarter of this year, Netflix's revenue increased by 3.7% year-on-year to US$8.162 billion, with 1.75 million new paying users and a total of 232.5 million paying users, which was lower than analysts' expectations. According to ITBEAR Technology Information, in the highly competitive streaming media market, Netflix hopes to expand its revenue sources through advertising models and further promote its business growth.

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