Shonda Rhimes attends the 2018 Vanity Fair Oscar Party in Beverly Hills, CA on March 4, 2018.
Presley Ann | Patrick McMullan | Getty Images
Shonda Rhimes, the powerhouse producer of “Bridgerton” and “Inventing Anna,” is one of many showrunners, creators and writers. netflixThe content will include mid-video ads, according to people familiar with the matter.
Rhimes and Intrepid Pictures’ Trevor Macy and Mike Flanagan are among a group of creators who have told Netflix executives they believe ads are hindering their storytelling, said the people, who asked not to be identified. Netflix is telling creators it won’t share any revenue from their ads, an official said.
Netflix isn’t the first streamer to have an ad-supported tier. But in the past, we’ve used our distaste for commercials as a marketing tool to seal deals with creators. Rhimes said that in 2021 he signed a multi-year deal with Netflix to produce content exclusively for the streaming service. Netflix when she signed her deal had a firm policy of not including ads Its programming reflects the longstanding beliefs of co-founder and co-CEO Reed Hastings. Both Rhimes and Netflix declined to comment.
Netflix releases low-priced version Advertising support service This week in the US and other countries. Netflix decided to offer an ad-supported tier as revenue and subscriber growth plateaued as the global coronavirus pandemic ended.netflix about 223 million global subscribers.
Netflix executives have told creators that they carefully placed mid-roll ads at narrative intervals for each episode, according to people familiar with the matter. They also told creators they didn’t think many people would sign up for the basic ad tier compared to subscribers who didn’t pay for commercials, they said.
Netflix’s head of operations Greg Peters said in October, “We basically use our internal content tagging team to find natural breakpoints so that we can serve ads at the most discreet points. I am trying to
Still, some creators aren’t satisfied with the explanation: Intrepid Pictures produces horror movies and series for Netflix. They are not particularly suitable for inserting advertisements, as they kill the tension of the building. His single 50-minute episode of Intrepid’s “The Haunting of Hill House” consists of five long single-shot takes.
That episode, the sixth in the series (“Two Storms”), is punctuated by three one-minute commercials, each consisting of three ads, at a $6.99 tier.one of the main reasons Intrepid signed an exclusive overall deal with Netflix in 2019 Streamers avoided advertising entirely, according to people familiar with the company’s thinking.A spokesperson for Intrepid declined to comment.
No revenue sharing
Not all creators are unhappy with Netflix.Ryan Murphy signed a $300 million deal with Netflix in 2018according to people familiar with his work, making episodes of his series in three acts to facilitate ad placement. According to a person familiar with the thinking, he has not complained.
The Directors Guild of America and the Writers Guild of America declined to comment for this article.
Splitting revenue from ads, especially commercials that interrupt the flow of storytelling, could be a way to assuage frustrated creators who feel Netflix changed the rules mid-game. But Netflix has no plans to do so, according to people familiar with the matter. Netflix owns its own shows and can insert ads whenever and wherever they want, so creators have little leverage other than to complain.
Still, other media and entertainment companies are getting around the problem of intrusive ads or even agreeing to share revenue in some cases. warner bros discovery‘s HBO Max has decided not to include mid-roll ads on its HBO shows to avoid disruption issues for prestige shows. When HBO sold shows to linear cable networks in syndication, such as when “The Sopranos” aired on his A&E, creators were able to participate in a revenue share, according to people familiar with the matter. . An HBO spokeswoman declined to comment.
Some creators who create content exclusively for Disney+ also have the right to participate in a share of the advertising revenue, depending on the terms of their agreements, according to people familiar with the matter. disneypolicy. But unlike Netflix, Disney owns a linear cable network, which ultimately allows Disney+ shows to air alongside commercials. A Disney spokeswoman declined to comment.
–CNBC’s Sarah Witten Contributed to this article.
Watch: Netflix Launches Ad-Based Subscription Plan