Plan Netflix's First Advertising Offering: Packaging, Ad Experience and Rollout

You are a product manager at Netflix and you own the launch of the company's first-ever advertising offering. How would you approach it? ```hint Follow the money both ways An ad offering brings in new revenue, and it also gives current members a cheaper option. Work out what has to be true about its price and its ad revenue for the launch to come out ahead, and let that shape the design. ``` ### Clarifying Questions - Is the main goal to win price-sensitive viewers who do not subscribe today, to add revenue per member, or both? - Should ads arrive as a new, cheaper plan next to the existing ad-free plans, or inside plans that already exist? - Does the launch cover every country at once, or a first set of markets? - Is there any ad technology or ad sales team in place, or is deciding whether to build or partner part of the job? ### What a Strong Answer Covers - The business reason for ads and how they fit a subscription service built on uninterrupted viewing. - Which viewers the ad offering targets, and how it is packaged and priced against the ad-free plans to limit downgrades. - The viewing experience with ads: formats, ad load, frequency and the places ads never appear. - The advertiser side: inventory, targeting, measurement, and whether to build or partner for ad technology and sales. - A phased launch with success metrics and guardrails that net new revenue against downgrades and lost viewing. ### Follow-up Questions - In the first month, many existing members switch from an ad-free plan to the ad plan. How do you decide whether that is a problem? - Some studios license their titles only for ad-free viewing. How does that change the launch? - How would you decide how many minutes of ads per hour to show?