Beautiful Virgin Islands


Netflix: $11.5bn wiped from streamer's stock market value as ad funded service gets off to bad start

Netflix: $11.5bn wiped from streamer's stock market value as ad funded service gets off to bad start

One might have thought, to judge from the acres of newsprint and hours of airtime devoted to its documentary about the Duke and Duchess of Sussex, that this would be a boom time for Netflix.
Not so.

Shares of the streaming giant fell by more than 8% this afternoon, wiping $11.5bn from its stock market value, on a report that its new advertising-funded service has got off to a poor start.

Digiday, a specialist publication that covers the digital media market, reported that audiences for the service have fallen short of the numbers that Netflix guaranteed advertisers.

It said, quoting five advertising agency executives, that audiences had only been around 80% of the numbers promised to advertisers in some cases and that, as a result, Netflix was offering them refunds on adverts yet to run.

Reporter Tim Peterson quoted one ad agency executive as saying: "They can't deliver. They don't have enough inventory to deliver. So they're literally giving the money back."

The article said that Netflix had been selling ads on a so-called 'pay on delivery' basis: in other words, advertisers only pay the company for viewers who actually watch their adverts.

It said that Netflix has been charging more, per numbers viewing adverts on its platform, than rival Disney+ - which briefly overtook Netflix earlier this year as the world's biggest streaming platform.

The company has been charging $65 for every 1,000 viewer impressions while Disney+ has been charging $50 for the same number. Digiday said that Netflix has since cut its price to $55.

The article added that, in some cases, advertisers had not been taking a refund but instead rolling over their ad spend to the first three months of next year in the hope that Netflix can build a bigger audience over time.

Other advertisers, though, have sought refunds so they can deploy their ad spend elsewhere during the crucial Christmas season.

The streaming wars

Netflix launched its new ad-funded service last month - seven months after first announcing it was thinking about the idea - in a bid to bolster its revenues.

The company shocked Wall Street when, in April, it announced it had suffered a fall in subscriber numbers during the first three months of the year.

The ad-supported service, which Netflix promised would carry just four to five minutes worth of advertising per hour, was launched in the US with a monthly subscription fee of $6.99.

Other streaming platforms, including Disney+, Hulu (which is jointly owned by Disney and Comcast, the parent company of Sky News) and HBO Max, which is owned by Warner Bros Discovery, are expected to charge more for their ad-funded services.

Wall Street is currently watching keenly to see whether Disney+ changes the price of its services more broadly following the dismissal last month of Bob Chapek, its former chief executive, who was replaced by his predecessor Bob Iger.

Digiday said that, while Netflix had struggled to meet its existing promises to advertisers, it was still seeking for ad deals for next year.

Separately, Netflix shares have also come under pressure after downbeat comments from one of the company's sternest critics on Wall Street.

Laura Martin, analyst at the investment bank Needham & Co, said that she eventually saw the business being overtaken by its competitors and eventually losing customers to them.

She told clients in a note to treat the shares "with caution" and added: "We see Netflix at a competitive disadvantage…because it doesn't own a bundle to lower churn in the US and it has largely saturated its offshore [total addressable market] already."

Today's decline in Netflix shares means that they have fallen by more than 51% so far this year - although they have rallied by some 60% since hitting their year's low in early May.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Upcoming Pandemic Inevitable, Warns Former UK Chief Scientific Advisor
I have a dream, MLK inspiring speech
British Tourists Assaulted by Bouncers in Pattaya, Thailand
Aretha Franklin, Marvis Staples - Oh Happy Day
Facebook Delays Removal of Fake Account Exploiting TikTok Star
BVI Freedom Song
Billionaire Non-Domicile Flees UK Amid Tax Law Changes
Billy Preston - You Can't Beat God Giving (Live)
Nicki Minaj's Manchester Concert Canceled After Amsterdam Arrest
VIRGIN ISLANDS REGGAE CARIBBEAN RIDDIMZ
UK Conservative Party Proposes Mandatory National Service at 18
Oh Happy Day Edwin Hawkins - Anthony Brown w FBCG Combined Choir
Kate Middleton's Public Absence Throughout 2024
'Stand by Me' performed by Karen Gibson and The Kingdom Choir
Asylum Seekers Arriving In UK by Sea Exceed 10,000 This Year
National Anthem of the British Virgin Islands - Oh, Beautiful Virgin
UK Criticizes ICJ Order on Israel's Rafah Assault
Hello Dolly
Ukraine's Fight Against Corruption Gains Ground Amid War
for KING & COUNTRY - Amen (Reborn) [feat. Lecrae & The WRLDFMS Tony Wi
Czech President Petr Pavel Injured in Motorcycle Accident
Bob Marley - Get Up Stand Up
Record Number of Abortions in England and Wales
Yes He Can
Paul McCartney Honours Bruce Springsteen at Ivor Novello Awards
What A Friend We Have In Jesus
US and UK to Reject ICJ Ruling on Israel's Rafah Offensive
Unforgettable
World Court Orders Immediate Halt to Israeli Offensive in Gaza
Touch The Hem Of His Garment
Understanding FLiRT COVID Variants and Their Impact
The Lord's Prayer
Baltic NATO Members to Construct 'Drone Wall'
THE GOD MOVEMENT...BEAUTIFUL BVI
Global Life Expectancy Dropped By 2 Years Due To COVID-19
Siyahamba
Macron Halts New Caledonia Voting Reform After Riots
Ray Charles And The Voices Of Jubilaton, Oh, Happy Day
Rishi Sunak Shelves Rwanda and Smoking Policies Ahead of Election
Ramblin' Rose
US Refuses World Court Jurisdiction
Protoje - Who Knows ft. Chronixx
China Conducts Surprise Military Drills Around Taiwan
Pressure - Virgin Islands Nice
Grim Polls Predict Major Loss for PM Rishi Sunak
Phil Wickham - House Of The Lord
Rishi Sunak's Campaign for UK Election: Key Issues Highlighted
My God Is Real (Yes, God Is Real)
German Property Crisis Worsens as Foreign Investment Declines
The Lion King Circle of Life by LEBO M. — LIVE at the HAVASI Symphonic
Princess of Wales's Taskforce Calls for Business Investment in Early Childhood
Louis Armstrong - When The Saints Go Marching In
Campaign Groups Condemn UK Report on Protests
Kanye West Sunday Service - hallelujah, salvation, and glory
Former Royal Marine Charged with Espionage Found Dead
Jonathan Nelson - I Believe (Island Medley
Australian PM Calls for Julian Assange's Freedom
From The Virgin Islands Sqad Up
ICC Seeks Arrest Warrants for Israeli and Hamas Leaders
Common, John Legend - Glory
UK's Infected Blood Scandal: Conclusion Nears After Seven Years
Anthony Evans vs. Jesse Campbell - If I Ain't Got You
Julian Assange Granted Right to Challenge US Extradition
I have a dream, MLK inspiring speech
Congo Army Thwarts Attempted Coup Involving Americans and a British Citizen
Aretha Franklin, Marvis Staples - Oh Happy Day
Ireland's Homeless Gain Voting Rights
BVI Freedom Song
Blinken orders crackdown on Israel-Hamas leaks
Billy Preston - You Can't Beat God Giving (Live)
Julian Assange Faces US Extradition: Key Facts
VIRGIN ISLANDS REGGAE CARIBBEAN RIDDIMZ
Jacob Zuma Takes Campaign to ANC Stronghold Soweto
Oh Happy Day Edwin Hawkins - Anthony Brown w FBCG Combined Choir
Attempted Assassination of Slovakia PM Robert Fico: Investigation Ongoing
'Stand by Me' performed by Karen Gibson and The Kingdom Choir
What Happens If an Iranian President Dies in Office?
National Anthem of the British Virgin Islands - Oh, Beautiful Virgin
Spain Recalls Ambassador After Argentina President's Remarks
Hello Dolly
Rishi Sunak Faces Cabinet Backlash Over Proposed Changes to Foreign Student Visas
for KING & COUNTRY - Amen (Reborn) [feat. Lecrae & The WRLDFMS Tony Wi
Rwanda Denies Entry to Human Rights Researcher
Bob Marley - Get Up Stand Up
Iranian President Ebrahim Raisi Reportedly Killed in Helicopter Crash
Yes He Can
Blue Origin Resumes Space Tourism with 90-Year-Old Ed Dwight
What A Friend We Have In Jesus
Rishi Sunak and Wife Akshata Murty Wealthier Than King Charles
Unforgettable
New Dutch Government Drives Wedge Through EU Liberals
Touch The Hem Of His Garment
Iranian President Raisi Missing After Helicopter Goes Down
The Lord's Prayer
Freemasons and ‘Global War Party’ Accused of Conspiring Against Georgia
THE GOD MOVEMENT...BEAUTIFUL BVI
Poland Supports Rolls-Royce's Nuclear Power Plant Initiative
Siyahamba
European Ports Overflow with Unsold Electric Vehicles
Ray Charles And The Voices Of Jubilaton, Oh, Happy Day
×