Netflix is reportedly giving some Australian advertisers their money back after failing to meet audience expectations just three months after it launched its ad-supported subscription plan.
Multiple advertisers that spoke to The Sydney Morning Herald anonymously said that Netflix was refunding their money, believing that it would not be able to deliver the audience numbers it promised upon signing year-long agreements with brands.
Netflix declined to comment on the story to the SMH.
Digiday said in December that Netflix was falling short of its global ad-supported viewership targets, only hitting 80 per cent of the promised numbers.
Execs have previously told B&T that Netflix’s lack of existing advert infrastructure would damage its initial move into the advertising market.
“The challenge with Netflix was always going to be, because they’re an outlier, that they didn’t have any existing infrastructure,” said Kristiaan Kroon, Omnicom’s CIO.
Whilst Paramount+ has the “benefit of Channel 10’s sales team” and Disney+ has an “existing sales team,” Netflix remains new to the Australian market, he added.
However, change might be on the horizon. Netflix rolled out its anti-password sharing tech to users in New Zealand on Thursday last week and said the changes will be coming to Australia in the coming months.
We know there’s confusion about sharing Netflix.
A Netflix account is intended for one household, so we’re rolling out new features in New Zealand (and AUS in the coming months) to give you more control over your account…
— Netflix ANZ (@NetflixANZ) February 8, 2023
While many users have told Netflix with glee that they will be cancelling their subscription with the streamer, the changes might inspire users to switch to the cheaper ad-backed tier.
However, it will need to up its ad targeting and adjust the state of its inventory. It has very basic categorisations for depictions of sex, nudity, drug and alcohol use, and violence, across its programs, meaning that advertisers might be reluctant to advertise alongside certain shows or movies.
It is also unable to monetise all of the shows and movies on the platform as it originally struck deals without the proper licensing to allow advertising.
