The foundations of SVOD are starting to crack as we watch the activities unfolding at Netflix with great interest. Heartened by their historically sound strategic moves, IAB Canada welcomes the added inventory into the Canadian marketing landscape.
CTV represents one of the largest areas of growth potential for the Canadian digital advertising market. Last year’s revenue indicates that the platform was in its infancy and is growing at over 180% year-over-year. Advertisers cite that one of the challenges to realizing CTV’s potential to date has been a lack of inventory to support scaled campaigns that take advantage of the powerful platform capabilities offered through this channel.
Netflix has shown great commitment having invested significant dollars in the Canadian marketplace supporting content development and creating jobs. In fact, they have spent over $200 million a year on developing shows in Toronto alone. Since 2017, Netflix has invested in $2.5 billion in productions in Canada and plan to open an office in Toronto. All of these indicators point towards the making of a great case study that supports the value of digital advertising.
With roughly 6.5 million subscribers (although there are reported drops in 2022) and almost $800 million in revenue generated, Netflix must now strike the correct balance between ad-supported v. subscription customers in a way that provides an acceptable user experience where ads appear. If they can avoid outrageous ad loads and maintain a stable subscription base while offering the ad-supported tiers, their model could see the same success as other hybrid platforms like Spotify in the audio space.
All eyes are on Netflix as they announced their plans to accelerate their ad strategy to launch this year in Q4. It is sure to be a major discussion point within our Video and our newly formed CTV committee and sits squarely on the IAB Tech Lab as they continue to innovate on CTV products that will help standardize everything from optimal user experiences to measurement-readiness and fraud-prevention.
We look forward to hearing more about this topic at the State of the Nation event on June 1 ,2022 where we will have a preliminary look at the growth in revenue for the channel but also touch on standardization and the road map to support its growth in the coming months and years.
If you would like to join any of these discussions, or are interested in securing an invite to our upcoming CTV committee meeting, reach out to firstname.lastname@example.org.