Netflix’s price cut

Netflix, which witnessed a recent rise in its ad-supported tier, has slashed its ad prices to levels well below what it initially charged advertisers, AdWeek reports. 

The streaming service's latest ad CPMs range from $20 to $30, a drop from the $65 CPM two years ago when Netflix entered the ad market.   

The new rates according to advertisers who spoke to AdWeek include $20 for a 15-second ad slot and $25 for a 30-second slot. These changes come as Netflix begins expanding its programmatic ad offerings, partnering with ad tech firms like The Trade Desk, Google’s Display & Video 360, and Magnite.

The drop from previous years

In 2022, Netflix introduced its ad pricing with a CPM of $65. By last year, this price point had decreased to a range of $39 to $45, reflecting a reduction of $20 to $26 per CPM.

The current ad CPMs have dropped further to between $20 and $30. This recent adjustment represents a further drop of $9 to $15 per CPM from last year's rates. 

Impact of the competitive market

This price reduction reflects Netflix’s approach to enhancing its attractiveness to advertisers. Competitors such as Amazon Prime Video,  disrupted the market earlier this year with its “Preferred Deal” ad tier offering CPMs starting at $26. Prime Video’ opt-in for ads with an option to pay more to skip them, has already attracted a large audience. 

With its ad rates, Netflix aims to remain competitive and challenge competitors like Prime Videos.

Netflix, in contrast, offers an opt-in ad-supported model, which has resulted in 40 million global monthly active users compared to Prime Video’s 200 million.