Rev Shares Are In Short Supply; Will Ads Save Or Ruin Netflix? |

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A Shorts Deal

YouTube’s expansion of revenue sharing to Shorts is a classic move – but with a pretty big twist, Digiday reports.

Normally, Google cuts creators in on the ads it serves during or right before their video. But with Shorts, which is a TikTok clone, people don’t click to the landing page of a specific video and wait for a pre-roll. Rather, they slide from video to video, some of which happen to be advertisements. Long story short, YouTube is monetizing the time between videos, and the quality of the video content on either side of an ad often has little to do with the value of the impression.

Creators are then paid from a pool of ad revenue based on their engagement numbers. This creates a perverse incentive for creators, though, because Google pays music licensing fees (either a third of the ad revenue or two-thirds if a video uses two songs) before it pays into the pool. In other words, an account that uses music effectively for Shorts contributes less to the overall pool but has the potential for a bigger payout than other creators, depending on their level of engagement.

Desperate Measures

Netflix claims it’s pleased with the AVOD engagement it’s seeing so far, but to say the streaming giant has had a rough year would be an understatement. 

Netflix lost a million subscribers in Q2, regained some of them, its stock price tanked, and now CEO Reed Hastings is stepping down.

Still, Netflix is in a better place than it was a year ago, according to Wired.

The streamer closed out 2022 with 231 million total subscribers, including a much-needed win on new sign-ups, as opposed to users switching from the ad-free to the ad-supported plan. Netflix added 7.66 million net-new subs in Q4 and attributed the bounceback to Basic with Ads, but it didn’t disclose how many new subscribers signed up for its ad tier specifically. (It didn’t disclose ad revenue, either.)

But now that Netflix does, presumably, have ad revenue to speak of, it will have to shift away from prioritizing subscribers as its main metric to demonstrate growth.

When a company decides to incorporate ads, it “cannot be a side business, or something that just complements another business model,” Tony Gunnarsson, an analyst at investment firm Omdia, tells Wired.

Ads “very quickly become the dominant way of doing things,” he said.

Netflix and Chill?

Speaking of Netflix, the streamer is cozying up to dating app Bumble for “Netflix Nights In,” a trivia game about Netflix shows that lives in the Bumble app. 

The games will run every Monday from January 30 through March 13, Mashable reports. 

Every week, Bumble singles can test their knowledge on a different Netflix show with a themed trivia quiz, including cameos from series such as “Stranger Things,” “Squid Game” and “Love Is Blind.” Answers will only be revealed once both singles answer the question. 

A recent Bumble survey of 2,800 US members found that the TV shows or movies people watch come up quite often on dates – a whopping 72% of respondents talk about entertainment whilst wooing. Meanwhile, 78% of people say they find conversation flows better when it turns out they like the same shows and films. 

Maybe bonding over loving (or hating) “Selling Sunset” is what it takes to find your person.

But Wait, There’s More!

IAB CEO David Cohen warns that Apple and certain voices in Washington want to “cripple” the ad industry. [Ad Age]

Amazon extends its Stripe payment deal, and Stripe expands its AWS commitment. [release]

Meta is updating end-to-end encryption on Messenger. [TechCrunch]

Soren Iverson: The “gamification” of unsubscribing. [blog]

Disney plans to extend Hulu’s ad targeting options to the ad-supported tier of Disney+. [Digiday]

Tech holding company Tiny merges with WeCommerce. [release]

You’re Hired!

Reddit promotes Harold Klaje to become its first CRO. [Insider]

Integral Ad Science names Kevin Alvero as head of global compliance. [release]

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