The unlikely alliance between Netflix and Amazon
Why Netflix is partnering with Amazon in advertising
A surprising new partnership for Netflix. After striking a deal in June with TF1 to stream France’s leading TV channel and its on-demand programs, the streaming giant is now teaming up with Amazon to sell its ad campaigns. Starting in the fourth quarter, advertisers will be able to buy space through the e-commerce behemoth’s ad-buying platform — even though Amazon, with Prime Video, is one of Netflix’s biggest rivals.
This move underscores the Los Gatos-based company’s strategy to open its doors to every major player in the market, three years after launching its ad-supported tier, which passed 94 million subscribers in May. Netflix has already partnered with Google, Microsoft and Yahoo. The goal: boost both pricing and ad inventory sales.
Netflix is upbeat about ads
At half the price of the standard subscription, the ad-supported plan has become an affordable way to lure new customers. It now accounts for more than half of new sign-ups in markets where it’s available. But commercially, the early days were bumpy, weighed down by an overly ambitious pricing grid. Netflix has since scaled back. Initially set at €40 to €50 in France, the CPM (cost per thousand impressions) has been lowered to €20–€25, much closer to industry norms.
According to internal projections obtained by The Wall Street Journal, Netflix is upbeat about the future: it expects $9 billion in ad revenue by 2030 — a steep increase from 2024, when the figure stood at $1.45 billion, according to eMarketer estimates.
To reach those targets, Netflix is betting on a larger ad inventory, fueled by subscriber growth and its increasing investment in live events, where ads are shown to all viewers. The company is also retooling its commercial approach, after its first partner, Xandr, a Microsoft subsidiary, delivered underwhelming results.
The power of data
In June, Netflix launched its own ad platform to sell inventory directly, with early tests in Canada showing promise. In an increasingly crowded premium video ad market, the streamer also wants to make buying its ads even easier by integrating with Amazon and Google’s tools.
The tie-up with Amazon also follows another logic. Earlier this year, the Seattle giant began tapping into the vast trove of data it collects from customers, such as purchased products and search queries. Analyzed by algorithms, these “hundreds of billions of signals” to pinpoint audiences most likely to buy a brand’s product or service. That means sharper targeting, better campaign performance — and potentially higher ad prices.
Netflix, for its part, doesn’t have access to this kind of data. To appeal to advertisers seeking this type of campaigns, it has little choice but to lean on Amazon, which is rapidly expanding its advertising empire. Disney+ and streaming-device maker Roku have already taken similar steps.