Ad-Supported Plan Launched in Korea in 2022
Data-Driven Approach and Content Relevance
Strong Commitment to Active Partnerships with Advertisers
Global online video service (OTT) Netflix is seeking new opportunities through an ad-supported subscription plan. The plan, which is about 60% cheaper than existing plans, aims to attract new users and establish itself as a digital medium for advertisers targeting the global market. Netflix is focusing on advancing personalized ad technology that does not interfere with content viewing.
Lee Chun, Director of Netflix Korea Advertising Division, is speaking at the 'Media Issues and Context' seminar on the 26th. Provided by the Digital Industry Policy Institute.
Lee Chun, Director of Netflix Korea's Advertising Business Division, attended the 'Media Issues and Context' seminar hosted by the Digital Industry Policy Institute on the 26th and said, "We view advertising not simply as a revenue source but as a form of content," adding, "We will provide an optimized ad experience that does not disrupt viewer immersion."
Netflix introduced its ad-supported plan in Korea in November 2022. Users can enjoy high-definition content for 5,500 KRW per month, about 60% cheaper than the standard plan, in exchange for watching ads. Among the 190 countries where Netflix is available, the ad-supported plan is currently offered in 12 countries including Korea. In these countries, more than 55% of new subscribers choose the ad-supported plan, showing high preference. Given the stagnation in OTT growth and subscriber increases after the COVID-19 pandemic, the ad-supported plan has become a viable alternative.
Lee explained the ad-supported plan as "providing viewers with a wider range of price options while allowing them to enjoy content at a reasonable price." He added, "For advertisers seeking new advertising solutions, we offer an innovative advertising system," noting that "Netflix’s diverse content is popular, providing effective marketing opportunities for advertisers."
Netflix applies various ad formats to ensure that ads do not disrupt viewer immersion. They limit the number of ad exposures, advertise products related to the content, and focus on reducing resistance and fatigue by considering viewer preferences. Lee said, "Netflix operates under the mission of 'Making the world more enjoyable,' and we approach advertising with the same principles and philosophy," emphasizing that "advertising is an extension of content."
Netflix uses various ad formats such as 'pause ads' that appear when viewers pause a video for more than 5 seconds, 'binge ads' where viewers watching three consecutive episodes watch the fourth episode without ads, and inserting QR codes within ads.
This year, Netflix plans to introduce an 'ad tech platform' to improve accuracy in reaching target consumers desired by advertisers (companies). Lee stated, "It will enable advanced performance measurement of ad campaigns," and added, "We will strengthen cooperation by forming various strategic partnerships with domestic advertisers and advertising agencies."
Shin Won-su, Vice Chairman of the Korea Digital Advertising Association, said, "The Netflix platform can be a cost-effective means to deliver brand images worldwide, riding on the Korean Wave." Kang Shin-gyu, Senior Researcher at the Korea Broadcast Advertising Corporation, noted, "There is a case where the Korean brand 'Matang Kim' increased brand awareness in the U.S. market through Netflix advertising," and emphasized, "It is important to conduct personalized advertising limited to usage behavior data to avoid privacy issues."
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