netflix

Netflix and Facebook seem to share a crucial thesis about the future of TV shows

Both Facebook and Netflix are currently funding their video ambitions with a single revenue model (subscriptions or advertising) as opposed to the dual revenue model followed by broadcast/cable networks and other streaming competitors such as Hulu and YouTube.

Facebook believes that it can offer a revenue split with content creators that will incentivize them to produce quality video without a large upfront guarantee.

This is where the market dynamics of addressable advertising kick in. Let’s assume the following:
1) Addressable Video CPM $ (cost for 1,000 impressions) — $100
2) Non-Addressable Video CPM $ — $25
3) Revenue Share — 70% for publisher and 30% for Facebook

The Facebook portion of the CPM $ ($30) could be greater than what the publisher currently charges without targeting. This is solely due to advertisers willingness to pay more to reach the intended target.

READ NEXT

Want the latest insights from around the video advertising industry?
Subscribe to our State of the Screens Newsletter.

logo

Thank you

We have received your message and will be in touch shortly.

logo

Contact Us