Shonda Rhimes, the high-powered producer behind "Bridgerton" and "Inventing Anna," is among a number of showrunners, creators and writers who have expressed displeasure with the decision to include mid- video ads in their content.
The people, who asked not to be named because the discussions are private, said that a group of creators have told the company they don't like the ads. The people said that creators would not be getting any revenue from advertising with them.
There are other streamers with ad-supported tiers. It has been using its previous aversion to commercials as a marketing tool. Rhimes made content for the streaming service in a multiyear deal. Reed Hastings, the co-founder and co-CEO of the company, has always been against advertising in its programming. Rhimes and Netflix didn't say anything.
There is a lower-priced advertising-supported service in the U.S. Due to the end of the global coronaviruses epidemic, revenue and subscriber growth have stopped. The company has more than 200 million subscribers around the world.
According to people familiar with the matter, executives have told creators that they have placed midroll advertising at intervals that make sense with each episode's storyline. The people said that they don't expect many people to sign up for the basic advertising tier.
In October, Greg Peters said that they were using their internal content tags to find those natural breakpoints so that they could deliver the ad in the least intrusive point.
Several creators don't like the explanations. The films and series are made by the company. Those are not good fits for ads because they kill tension. There are five long, single-shot takes in the 50 minute episode of "The Haunting of Hill House".
Three one-minute long commercial breaks interrupt the sixth episode of the series, called "Two Storms". According to people familiar with the company's thinking, the main reason for signing an exclusive overall deal with the streamer was its total avoidance of advertising. A person who works for the company declined to speak.
Some creators are happy with the service. According to a person familiar with Ryan Murphy's work, his series' episodes are easy to place because they are in three acts. A person familiar with Scott Frank's thinking says he has not complained.
The Writers Guild of America and the Directors Guild of America did not respond to the story.
Splitting revenue from commercials that interrupt the story could be a way to mollify creators who feel that their work has been changed mid game. According to people familiar with the matter, that won't be happening. With its own programming and the ability to insert ads where and when it wants, it's easy to see why creators wouldn't want to work with it.
The issue of interruptive ads has not been an issue for other media and entertainment companies. The issue of interruption of prestige programming was the reason why midroll advertising was not included in the programming. According to a person familiar with the matter, creators have been able to participate in revenue sharing when a show is sold to a linear cable network. The person who spoke declined to say anything.
According to a person familiar with Disney's policies, some creators of Disney+ content have the right to participate in advertising revenue sharing. Disney has cable networks that could eventually show Disney+ programming. A Disney spokesman wouldn't say anything.
Sarah Whitten is a correspondent for CNBC.
There is a new ad-based subscription plan fromNetflix.
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