The news: Netflix is failing to meet the viewership guarantees made to its initial class of advertisers for its month-old ad-supported tier, per Digiday.
A flurry of activity: Given that the company waited until the last possible moment to “resort” to an ad-supported tier, it played catch-up admirably well over the last half year. It partnered with Microsoft to launch the offering, brought on third-party measurement partners, and filled key ad sales leadership roles.
Our take: Netflix allowing advertisers to request their money back is a novel approach to its inability to hit guarantees coming out of the gate. It upends the traditional TV purchasing model and the “make-good” approach that has been used for years.
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