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We have known for months that it was coming – Netflix new ad-supported tier that would cost consumers less in exchange for ‘exciting’ ads.  It has been top of mind with many senior-level media buyers across the country, and something that’s kept them on the edge of their seats in anticipation.

Netflix has now announced that Canadians will have access to this new tier for $5.99 per month, starting on November 1st which is significantly less that other plans that start at $9.99 and go as high as $20.99 per month.  In exchange for the lower cost, consumers will have to sit through four to five minutes of ads per hour to be played before and during their TV shows and films.

Apparently, inventory is almost sold out already, and Netflix is selling advertising on a fixed cost basis, and at launch time only providing ad targeting based on country, genre or content in the platform’s “top ten.”  With a $10 million minimum commitment in annual ad spending from agencies, Netflix has set itself up as a premium ad buy right from the start.  Will this strategy work in the long run for Netflix?

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