Lessons from the Netflix Ad Tier [Weekend WRAP 86]

Published about 1 year ago • 3 min read

Hey Reader,

In case you missed it, I'm hosting a webinar on Tuesday, April 25th about how to capture and develop your notes into "immortal ideas." The webinar starts at 1pm ET, 10am PT — register here with a click.

I have a thread about AI writing at the end of this email. I'm so curious about this, but I also believe the more AI and VR content is available, the more important in-person events will be. One of my favorite live conferences is ConvertKit's Craft + Commerce in Boise, ID. Save $50 with my link, I hope to see you there June 8-10!

💡 One Big Idea: The Ad Supported Creator

I’ve been on a philosophy/productivity streak for a few months now, but I have a thought on business strategy and how it applies to content creators. One of the writers/podcasters I pay a membership for is Ben Thompson, founder of Stratechery — a bundle of business and technology content for $12/month. The Stratechery bundle is supported entirely by members, i.e. no ads, and is content-only, i.e. no forum, or direct calls with Ben.

On a recent episode of Dithering, Ben and John Gruber discussed Netflix revealing the success of their $6.99 ad tier. Between those fees and the ad sales, turns out Netflix is making more money on ad-tier members than on standard plan members at $15.99.

Win-Win, right? Customers have the option to pay 54% less than before, and Netflix can offer that option but still make more money.

The Content Creator Angle

This is at work in the content space too, albeit most without a massive ad sales team to book sponsorships. Ryan Holiday’s Daily Stoic Life is a good example. Ryan sends a week-daily email (obviously) and 2-3 each week have ads. As a DSL member, you can have ads removed along with access to Ryan’s quarterly challenges and weekend stoic emails.

Over the past 6 months you’ve noticed I added sponsorships on my newsletters. A big part of that was joining the ConvertKit sponsor network, who handle all of the sales then take a 20% cut of revenue. And you’ve likely seen paid newsletters on Substack (I pay for Steven Johnson’s) that offer an extra post or two and maybe a podcast feed for members.

Key Takeaway

There are several ways to make a living, or a profitable side hustle, creating unique content. Product (courses, templates, etc) are often the best way to start selling because you don’t need a minimum audience size to launch. Build, launch, learn, iterate, and launch again. But once you hit a critical number of readers or viewers (say around 5,000) it’s worth exploring a sponsor tier.

Sponsors (ads) provides you, the creator, an additional revenue stream. In some ways makes it easier to offer the best versions of your courses and coaching because each launch, because the all-or-nothing stress of the launch cycle isn’t the only source of revenue for the business.

👀 One Video to Watch: The Many Faces of Donald Glover

I’ve been watching a lot of Dodford’s videos lately, his production value and editing is one of the best on YouTube. This feature on Donald Glover is one of my favorites.

Glover is a modern renaissance man with talents in acting, writing, music, and stand-up. You may have seen him on Atlanta and Community, or heard his music as Childish Gambino. The man is one of the most talented creators and performers I’ve seen, and this video is a great deep dive into Glover’s story.

🧵 One Thread I Wrote: Putting my Brain in ChatGPT

I've written a previous WRAP about using AI for book notes and summaries, but this is my first venture into building an AI model for content.

For the actual programmers and engineers here, I'm not actually in the API and doing real models — this is all in the normal interface.

I fed ChatGPT several of my email newsletters and asked it to analyze the style. The reason? I'm establishing a baseline of my writing so ChatGPT can use my own writing history as a research and review "assistant" for future content. I have thousands of words and research now. I can ask ChatGPT to outline the next essay or summarize key points of new content.

Read the full thread with ChatGPT prompts, or click the image below.

My Favorite Conference of the Year: Craft and Commerce is June 8-10 in Boise, ID

ConvertKit's Craft + Commerce conference is my favorite event of the year. Even if you're not in the "creative content" market, many of my favorite people and speakers show up to this conference every year. I've seen Seth Godin, Tim Urban, James Clear, Glo Atanmo, Rachel Rodgers, and Casey Neistat.

This 3 day event also includes workshops, meetups, live ConvertKit support, and parties! This is the perfect opportunity to gain valuable insights, network with your peers, and have a blast doing it.

Use my link to save $50 off your Craft + Commerce ticket. Bring a friend and you can save even more! I hope to see you in Boise this June!

Have a great weekend,

Matt Ragland

p.s. if you have a (literal) minute to share feedback, click here.

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