Since Netflix disclosed plans to introduce an ad-supported tier by year-end, the media industry has speculated as to how that would be implemented. Now NBCUniversal and Google are looking to join Netflix’s ad-tier venture, according to a Wednesday Wall Street Journal report.
People familiar with the matter told WSJ Netflix is still in the early stages of developing an ad-selling strategy for the platform. The streaming giant is considering a partnership as a means to achieve that goal.
If Netflix were to partner with NBCU, the publication wrote, it would be able to tap into FreeWheel, Comcast’s video ad unit, to help serve ads.
Freewheel launched this week new identity capabilities for TV advertisers, helping them better connect first and third-party data to different IDs. YouTube already runs FreeWheel’s ad integration features on its platform.
Sources also told WSJ NBCU would help Netflix in the U.S. and Europe. NBCU has been testing a variety of ad formats, including frame ads for its AVOD service Peacock and even an augmented reality experience.
One issue with an NBCU-Netflix partnership, WSJ continued, may be determining how much revenue Netflix would get from the deal. An agreement between the two companies would likely be exclusive, sources said.
Google, on the other hand, already has commercial ties with Netflix. The streaming service is a major customer of Google’s ad-buying technology, WSJ said, adding it’s likely Google would also seek an exclusive arrangement.
But Netflix is still up in the air on how to launch a lower priced ad tier, a company representative told WSJ, so it has yet to make a decision on the matter.
Roku is also considered a potential ad partnership candidate, WSJ wrote. The smart TV platform gained some media attention earlier this month, after rumors floated around about Netflix possibly acquiring the company. Roku responded to the internal chatter by halting employee trading of its stock.
Netflix Co-CEO Ted Sarandos is scheduled to speak Thursday at the Cannes Lions festival. Whether he will offer any updates on Netflix’s ad-supported strategy is uncertain, but sources told CNBC Netflix is looking to secure a marketing partner in the next two to three months, as well as hire a senior executive to manage relationships with any potential partner.