It’s still hard to scale, but Netflix’s ad revenue grew by two thirds in the first quarter.
Netflix said that its ad membership grew by 65% quarter-over-quarter in the first quarter of this year. This follows two quarters of similarly high growth as the company continues to expand its ad service. Forty percent of new subscribers chose the tier with ads, in places where that tier is offered. Netflix didn’t say exactly how many people have now signed up for Netflix with ads, but in January, it said it had 23 million monthly active users, so a 65 percent rise would have been a big jump.
Still, Netflix executives said that increasing the number of shows and movies that are available is their top goal and the number one request from advertisers. It’s not enough to have a lot of subscribers; it’s also important that those subscribers watch a lot of material. This is especially true in streaming environments with few ads.
READ MORE: Netflix Stock Rises 9% On The Strength Of Ad-Tier Growth
CFO Spence Neumann also said that even though the amount of ads has been growing, they haven’t been making as much money as they should be. This has caused the average income per user on the ad-supported tier to go down. Neumann and other Netflix execs, on the other hand, said that as they add new features for advertisers, such as measurement tools, the goal is for ad-supported subscriptions to make about the same amount of money as ad-free subscriptions.
Sony and Apollo Get Ready to Ask Paramount to Bid
The New York Times says that Sony and the investment company Apollo Global Management are talking about making a joint bid for Paramount. Many people have different ideas about what will happen with Paramount. There have been rumors of a merger with Warner Bros. Discovery have died down, but Skydance Media is said to be very close to completing a deal.
READ MORE: Video Accounted For Over A Quarter Of US Digital Ad Spending Last Year
The sources say that if Sony and Apollo go through with their bid and win, Paramount would become a media brand within Sony. Sony would get a lot more intellectual property (IP) from Paramount, and they would also bring a lot of new ways to sell IP. This would include Paramount+, a streaming service.
So far, Sony hasn’t made its own streaming service. Instead, it licenses its content to other companies, though it has started showing FAST channels in some countries. Whether Sony would want to take on Paramount+ as a single distribution point for its own IP or not remains to be seen.
Says Axel Springer CEO, “Don’t Fear Google, It’s Already Won”
Ten years ago, Mathias Dopfner, CEO of Axel Springer, wrote an open letter to Eric Schmidt, CEO of Google at the time, explaining why he was afraid of the search giant and how it could hurt traditional media businesses. A follow-up article by him came out this week in the German newspaper FAZ. It said that authors no longer need to be afraid of Google because the company has “won across the board.”
Dopfner said that Google’s business situation doesn’t reflect the new mood, even though he agreed that the public and politicians are more against the company.
“When I looked more closely, I saw that everything was much worse than I thought at first,” he said. “Most people now believe in what Harvard professor Shoshana Zuboff calls “surveillance capitalism.” Google (or Alphabet), which has a market value of almost $2 trillion, has mostly taken over the business model and sales of publishers, as well as those of almost all “creative industries.” Digital journalism has very little competition, and most of the time, it’s not a good way to make money.
One thing Dopfner did say that made him feel good was AI, which Axel Springer has openly accepted. Even though Google is also a big player in AI, Dopfner said that lawmakers and regulators will act much faster against AI than they have in the past when it comes to tech problems because AI affects power and democracy in a wider way. So, he thinks they’ll move faster to make sure everyone has a fair chance.
READ MORE: Paramount Reportedly Declined A $27 Billion Offer To Be Sold This Week
This week in tech
Identity Solutions for CTV Are Now Available from Yahoo Advertising
The launch of Yahoo Identity Solutions in CTV environments like Paramount, Tubi, NBCUniversal, and FreeWheel was revealed by Yahoo Advertising. Yahoo ConnectID and Next-Gen Solutions are two of the identity solutions. They let advertisers who use the Yahoo DSP target and track the success of their CTV campaigns. “As investments in CTV rise, identity signals are decreasing, which affects targeting and performance across all channels, including CTV,” said Yahoo’s Chief Revenue Officer, Elizabeth Herbst-Brady. “Yahoo wants to help advertisers adapt to new conditions by protecting our partners’ ability to reach and measure audiences and protecting consumers’ privacy.” We’re excited to announce that Yahoo Identity Solutions will now be available in CTV environments. This will help the product gain even more popularity in the business.
“Consent or Pay” Model by Meta is Banned by the EU’s Privacy Watchdog
Meta was asked by the EU’s privacy watchdog this week to let people use its apps for free without seeing targeted ads. The social media giant recently released paid versions of Facebook and Instagram without ads. This was done to comply with EU laws that limit how tech companies can use personal data for advertising reasons. But privacy groups are against the “consent or pay” approach and warn that more tech companies might follow suit.
Impact Media Starts Up with a Model Based on Attention-Based Guarantee
Impact Media, a new programmatic ad buying tool that lets advertisers pay only for ads that get at least a certain amount of attention, announced today that it is now live. Focusing on brands and independent agencies, CEO Wayne Blodwell said the company’s goal is to close the gap between how much money is spent on ads and how much attention they get. At start, Impact Media’s “Guaranteed Attention Measurement Suite” will only charge clients when a video or display ad is watched for three seconds or one second. In the future, the company wants to include radio and TV inventory. They say that billing rates will change based on the needs of each brand. Go to VideoWeek to learn more.
Goldbach teams up with Operative to offer a more advanced ad management solution.
It was announced this week that Operative is teaming up with the Swiss sales firm Goldbach Media. Goldbach will use Operative’s AOS to manage the full pitch-to-pay process for all of their linear and digital inventory. The two companies say that Goldbach will use AOS to handle a wide range of ad products, such as pause and fast-forward ads sent through Goldbach’s “Replay Ads” platform, as well as to optimize inventory and yield on client campaigns.
PubMatic and Virgin Media are working together to make FAST advertising bigger in the UK.
This week, programmatic tech company PubMatic revealed a partnership with Virgin Media to help the latter make money off of the inventory on its growing number of free ad-supported streaming TV (FAST) channels. In the UK, Virgin Media runs 15 FAST stations right now, and more are set to start up this year. David Bouchier, chief TV and entertainment officer at Virgin Media O2, said, “This is a big step forward for Virgin Media as we continue to grow and improve our TV services and go live with our FAST service.” “With PubMatic’s advertising solutions, we can now give our customers better advertising experiences while also getting the most engagement and value for our advertisers.”
Pixability and Cedara work together to cut down on the emissions from YouTube campaigns.
Pixability, a company that specializes in context and brand suitability, has teamed up with Cedara, a carbon intelligence tool, to lower the amount of carbon dioxide that YouTube ads produce. Cedara is going to add its tools for measuring and optimizing carbon to Pixability’s AI-powered solutions for contextual targeting. “As we start this important partnership with Pixability, we are proud to work with a company that shares our dedication to protecting the environment,” said Eric Shih, Chief Operating Officer at Cedara.
Adobe adds AI video tools and looks into partnering with OpenAI
Adobe said on Monday that it wants to add third-party creative AI tools to its video editing software, like OpenAI’s Sora. With this interface, OpenAI, Runway, and Pika Labs tools could make and use video in Premiere Pro. Adobe’s AI model, Firefly, will also be used to let users add AI-generated objects to parts of a scene or get rid of things that are not important in a movie. Firefly is already used to edit still images in Photoshop.
YouTube makes it harder for ad blockers to work.
YouTube is making it harder for ad blockers to work by saying that mobile users who watch videos through a third-party ad blocker app might get an error message or delay problems. The company started blocking movies with ad-blocking add-ons last year, and they are now essentially making this policy apply to mobile as well. The move is partly meant to get people to sign up for YouTube Premium, which doesn’t have ads.
IAS adds more safety measures for the TikTok brand
This week, Integral Ad Science, a company that checks and measures ads, said that it was adding Category Exclusion and Vertical Sensitivity Segments to its service for measuring brand safety on TikTok. Eleven more countries will be added to the measurement of brand safety and fitness. These are Bangladesh, Cambodia, Costa Rica, Denmark, the Dominican Republic, Finland, Greece, Guatemala, Hungary, Norway, and Panama.
Equativ makes its curation product better by adding news tools.
Equativ, an end-to-end ad tech company, added a few new features to its self-service curation tool, Equativ Buyer Connect, this week. Equativ says that the platform now has more addressability options, which makes deals easier, faster, and more clear for both buyers and sellers. The company also says it has made it easier to make deals with various media owners that use more data. Equativ’s CRO, Parag Vohra, said, “Adding more curation features to the EBC platform helps us reach our goal of streamlining supply chains by making it easier to make deals that are clear, straightforward, and flexible, as well as smart data-led targeting.” “With the addition of immediate campaign activation features coming soon, Equativ will be the only platform that can handle the whole curation process.”
This Week on TV
MFE Thinks That Ads Will Grow in Spain and Italy
This past year was tough for European broadcasters, as many of the big players saw their ad income drop. However, early signs for 2024 look better. This week, ProSieben said that it had seen a turnaround in TV ad revenues (see below). This week, MFE said that it had seen a six percent year-over-year growth in ad revenues in the first quarter of 2021. There was 5% growth in ad sales in Italy, which was its biggest market, and 8% growth in Spain. Go to VideoWeek to learn more.
Strong Work at ProSieben Raise the Bar in the MFE Battle
ProSiebenSat.1 owners are getting ready for a very important vote at the end of the month at its annual general meeting (AGM). This is because the company’s main investor, MFE-MediaForEurope, wants to have more control over the German broadcaster. ProSieben had a rough financial year in 2019, but the company has claimed a good start to 2024, which could give it an edge in negotiations with MFE. Profits for ProSieben were €867 million in the first quarter of 2024, which was up 6% year over year. The figures show that TV revenues are growing again. This is after a year in which group revenues fell 7%. Near the end of last year, when digital ad sales “partially offset” the weak TV ad market, the TV business began to show signs of rebound. Go to VideoWeek to learn more.
Amazon adds a live channel that can be bought on Prime and FreeVee.
Amazon is adding its broadcast service Amazon Live, which can be bought, to its US streaming services Prime Video and FreeVee. Amazon Live works like a normal shopping channel, but it has interactive features that let people look at goods and buy them right from the live stream. Amazon Live was already available in the US and India as a separate app. Since its launch in 2023, Amazon Live has gained more than a billion users, the company says.
Prime Video Channels in the US now have Viaplay.
Viaplay, a Nordic streaming service, has now started on Amazon’s Prime Video Channels service in the US. This is a way for customers to subscribe to and watch third-party TV channels through Amazon. In the United States, Viaplay used to have a separate streaming service, but it shut down this app as part of a larger plan to slow its growth in other countries. Prime Video Channels, on the other hand, let broadcasters keep a subscription presence in foreign markets without having to keep up and market a separate product.
Canal+ Holds on to Multichoice Even Tougher
This week, French carrier Canal+ bought more shares in Multichoice, a South African telco, bringing its total stake to over 40 percent. Canal+ is getting ready to take over the business. They made a deal last week that required Canal+ to make an offer for Multichoice because it owns so many shares in the company. Multichoice is now thinking about the offer. Under the rules of the deal, Canal+ can keep buying shares, but if it pays more than the buyout price for any shares it buys, it has to raise its buyout offer.
Disney+ buys the rights to show football games in Denmark and Sweden.
In Europe, Disney+ has started to add sports rights to its service. In Denmark and Sweden, it has bought the streaming rights for UEFA’s Europa League and Europa Conference, which are the second and third-level European club events. Disney+’s first move into sports streaming in Europe is to buy the rights for the next three seasons.
Ad Alliance finds that TV ads have a big effect on search results.
A recent study by RTL Data and OMG Germany for RTL Detuschland’s Ad Alliance found that ads led to almost a quarter of all brand web searches. More than half of these ad-initiated searches were started by TV ads. A group called Ad Alliance says the study proves that TV has a big effect on both short-term and long-term brands. Lars-Eric Mann, CMO of Ad Alliance, said, “The forces behind Google Search are an exciting area for us to look into because in real life, key figures like Google search volume or website views are being used more and more as measures of how well advertising is working.”
This is the week for publishers
Google is trying to block news links in California.
Google started blocking links to Californian news sites in its search engine this week for a small group of users. This is because of a bill that would make Google pay writers to link to their sites. The Californian Journalism Preservation Act is like laws in other parts of the world that require tech companies to talk to publishers about paying them to use their material, though the details are often different. The proposed rule in California was called a “link tax” by Google. The company also said it is stopping new partnerships with news publishers in California through its Google News Showcase and Google News Initiative products.
It looks like The Daily Mail is about to pass The Sun as the biggest news outlet in the UK.
The Sun is still the most widely read newspaper in the UK, but The Daily Mail is very close behind, according to new data from Pamco that was shared by Press Gazette. Pamco says that the Sun reaches 26.5 million people each month through print and internet, just above the Mail’s 26.3 million. But in the last six months, both publishers’ overall reach has gone down because fewer people are getting their news from social media.
The Daily Maverick in South Africa shuts down to warn of a crisis in journalism.
The Daily Maverick, a news website in South Africa, shut down for the day on Monday, telling its readers that there is a crisis in journalism because the market conditions make it impossible to keep going. The website has almost 30,000 users, and the money from their paid memberships helps keep the news free. But the website said that its current income, which comes from falling ad sales and donations, isn’t enough to keep its reports going.
WELT Introduces an AI Personal Assistant for Members
The German newspaper WELT, which is owned by Axel Springer, has released WELTgo!, an AI-based digital assistant for users.it says can be used to “delve into journalistic topics interactively and individually” and for everyday jobs like writing emails. Go WELTgo! is based on Axel Springer’s own AI Hey_, which joined a number of different GPT models. “GO WELL!” “offers a whole new way to experience journalism at WELT,” said Ulf Poschardt, head editor of WELT Group. “The version we have now is the most basic one that will ever be.” Go WELTgo from now on! is getting better every day. We’re learning along with our users and will keep making changes to the service to meet their needs.
The pay gap between men and women in the UK media industry narrows to 11%.
The pay gap between men and women in the UK’s media business has gone down a little, but it is still 11%, according to data that media companies gave to the government and that Press Gazette analyzed. This is a very small rise from the 12% seen last year. There has been more progress in getting women into top jobs across all industries: three quarters of those who had to give their gender pay data to the government saw an increase in the number of women in their top pay quarter.
This is the week for brands and agencies
Omnicom reports 4% growth in the first quarter.
The American agency holding company Omnicom released its Q1 financial data, which showed that its revenues rose by 4% year over year to $3.6 billion. The digital commerce platform Flywheel Digital, which Omnicom bought last year, was a big part of this growth, according to officials at Omnicom. And Flywheel was the main topic of conversation on Omnicom’s earnings call after the results. Omnicom saw Flywheel as very important to its future. On the call, Flywheel came up 64 times, which is a lot more than the hottest topic at the moment, generative AI, which only came up 13 times. Go to VideoWeek to learn more.
The IPA Bellwether report shows that UK advertisers’ budgets are still growing.
The latest IPA Bellwether Report shows that just under a quarter of UK marketers said their marketing budgets went up in the first quarter of this year. On the other hand, 15% said their marketing budgets went down. The net balance of +9.4 percent was less than the last report, but it has been positive since the second quarter of 2021. But because of ongoing inflation, the IPA thinks that ad spend will go down by 0.5% in real terms this year. This is a little better than the -0.7% drop they predicted last quarter.
Nike will spend the most on ads ever for the Olympics.
Reuters reported this week that Nike plans to spend more on ads for this year’s Summer Olympics than for any other Games. Heather O’Neill, head of Nike’s consumer, product, and brand, said in an interview that this summer will be “the most invested in and the biggest moment for Nike in years.” O’Neill says that Nike’s top investment priority right now is marketing. The sportswear brand wants to boost sales that have been slowing down, and its current plan is to focus on “fewer, bigger” marketing campaigns.
Last year, almost a quarter of all digital ad money spent in the US went to video.
The IAB and PwC’s most recent Internet Advertising Revenue Report says that digital ad spending in the US rose 7.3% in 2023 to hit $225 billion. And video is a big part of this growth; it has had the fastest growth rate in the last few years thanks to the flood of CTV inventory. In 2023, video sales reached $52.1 billion, up 10.6 percent. This means that video ads now bring in 23.2% of all digital ad revenue in the US. The study says that video ads will continue to grow quickly over the next few years. Go to VideoWeek to learn more.
Records a small drop in media inflation for the WFA
The current Outlook report from the World Federation of Advertisers (WFA) says that global media price inflation will drop from 3.2% in 2023 to 3.1% this year. But this trend isn’t likely to be the same in all types of media. Based on information from media price predictions from media agency groups and auditors, the WFA thinks that TV inflation will drop from 6.6% last year to 5.6% this year. Meanwhile, in the UK, prices for Adults and ABC1 Adults TV will likely go up by an average of 7% this year. This is because prices fell during decline in 2023.
UK TV may start showing political ads.
This week, The Guardian reported that ITV is thinking about running paid ads on its ITVX streaming app, even though the UK doesn’t allow paid political ads to air on TV. The law that says political parties can’t buy TV ads doesn’t apply to TV that you watch on the internet. So far, stations have not shown political ads. However, ITV is thinking about changing its mind, especially since not doing so will likely lead that money to tech-owned video platforms.
Fifty is chosen by Decathlon as the UK media agency
Independent agency Fifty was chosen by sports store Decathlon as its UK marketing agency after a non-competitive pitch process. Before, Goodstuff was in charge of Decathlon’s media work in the UK. Oliver Simpson, head of performance marketing at Decathlon UK, said, “Fifty’s capabilities are perfect for our growth goals. The AI platform shows how we can adapt to market trends more quickly and accurately.”
The IPA gives agencies free membership to ABC.
The Institute of Practitioners in Advertising (IPA) in the UK has teamed up with the Joint Industry Commission (ABC) to offer free ABC membership to IPA members. IPA agencies will be able to view ABC’s checked data on print, digital, and event advertising. “Being a member of ABC is a must for any IPA agency,” said Belinda Beeftink, research director at the IPA. “You know that ABC is a JIC run for and by the industry, providing trusted independent data to industry-agreed standards.”
New Hires Every Week
The Warner Bros. Dave Porter is hired by Discovery as a data manager.
The Warner Bros. Discovery said that Dave Porter has been hired as the new head of ad sales data, research, and insights. Porter is going to work to boost sales across all channels, with a focus on goods that are based on data. He was CEO of Canoe Ventures before.
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