Netflix's Peter Naylor on the Shift to a Virtual Upfront

Like last week's upfront events, Adweek's upfront week postmortems have now come to a close. We’ve already spoken with NBCUniversal’s Mark Marshall, Fox’s Marianne Gambelli, TelevisaUnivision’s Donna Speciale, Disney’s Rita Ferro, Warner Bros. Discovery’s Jon Steinlauf and YouTube's Sean Downey. Now, we're ending things with Peter Naylor, vp of worldwide ad sales at Netflix. This year marked Netflix's first time in the annual advertising showcase, with the company surprisingly shifting to a virtual presentation days before its Wednesday upfront week event. The shift came amid the ongoing Writers Guild of America strike, which also forced the event to feature executives instead of onscreen talent. Naylor talked about the decision to shift to a virtual presentation, the streamer's stock bump following the event and whether Netflix will return to upfront week in 2024. This interview has been edited for length and clarity. In Virtual Upfront, Netflix Says It Has Nearly 5 Million Monthly Ad-Tier Users Adweek: This was Netflix’s first upfront week event, and there was a lot of buzz heading into it. So looking back on the event, what are you proudest of?I'm proud that we've entered the market in a meaningful way. What we're trying to do is to communicate that we're focused on meeting the market in terms of our fundamental ad offerings. I like to call it being brilliant at the basics. We've already announced our partnerships with DoubleVerify and Integral Ad Science. We announced last week that digital ad ratings from Nielsen are officially coming this year. Things like targeting and sponsorships. Again, meeting the market where they expect us to be is something that I'm psyched about. And then I'm delighted to talk about our audience and our audience growth. We launched in 12 markets just six months ago, and we're off to a great start. I'm happy that we're in the market and the upfront for the first time, selling this great audience. What are your thoughts on the event? And what’s been the feedback so far?When it comes to what marketers are telling us, they're saying that the demand is strong for what we have. They like the kind of TV we have. And I say TV because, with our median age of 34 and our lite ad load, it's like, "Oh, yeah. That's the TV I want. I want to be in this amazing content." And when it comes to the feedback from the show, they were delighted that it was short and impactful. It's a long week, and we tried to deliver our message in a crisp way. So we met their expectations there too. And talking about the reaction to the presentation, Netflix was, I think, the only company to get an immediate stock boost.It's a happy ripple effect of our presentation, but it certainly wasn't our goal. Our goal was to communicate to the market and give them insights that hopefully will give them confidence to invest with us. Everybody's watching and eager to learn what we have. And frankly, the thing we're very careful about is to make sure that everything we put out there we feel is stable and information that the people who are in charge of investments can use to make recommendations when it comes to moving money our way. And if all that was received favorably by Wall Street, that's, again, a delightful ripple effect. How long was the decision in the works before you went virtual? What went into that decision?It really was a conversation we had with the New York Police Department, to be honest. The WGA, the Writers Guild of America, made it clear to the NYPD that they were going to very purposefully disrupt our event at the Paris Theater. And the police department said they were worried about pedestrian safety. So we just pivoted pretty quickly, and it was really just about safety and nothing else. And once we made that decision, we quickly filmed our event. We are lucky enough to have beautiful facilities, and we had all the executives ready. So we turned it around. Making great productions is what we do, so we can we can pull it off pretty quickly. And as you said, the shift to virtual happened quickly. So was that presentation the same as it would've been for a live event? Was it changed at all?A great deal of what you saw was what we had planned to present. We just adjusted a bit in light of the context of how we're presenting it, but by and large, the message and everything were the same, talking about our strengths. And we just had to film it, unfortunately. But fortunately, the production was super tight and beautiful with all of our content, so it seemed to work out. You also released the ad tier numbers for the first time, saying there are nearly 5 million monthly active users. Considering the stock price, that made an impact. Was the plan always to save the numbers for the upfront presentation?We're purposeful and deliberate with the numbers and the insight we release to the market, both to Wall Street and Madison Avenue. We want to make sure again that everything is stable and reliable as we think they need to be if people are making investments in the stock or the media. And this was a really good way to just share with everybody at once what those numbers look like. Being publicly traded, those quarterly earnings announcements are great force functions for releasing things, and then something like an upfront is a great force function for releasing our numbers. It's not like we're hiding anything, but we want them to be as stable and reliable as possible. It's a happy ripple effect of our presentation, but it certainly wasn't our goal.Peter Naylor, vp of worldwide ad sales at Netflix, on the company's stock jumping after the upfront week presentation. What were the top priorities you wanted to get across?We are communicating that we just need people to remember that it's still early days. If anything, we're focused on being brilliant at the basics, and I think we said that pretty quickly. We wanted to communicate the size and scale of the audience, and that's a very important global initiative—to grow the audience. And then, finally, of course, the content. All those sizzle reels, it's just show after show after show. We've got so much in the can, as they say, both returning and new shows. Some returning shows that I am particularly excited about—we've got Extraction 2 that is the new movie coming in June. Lupin is a French drama that's coming in October. And speaking of French, Emily Paris Season 4 is coming. And then new shows, Fubar from Arnold Schwarzenegger. That's coming Thursday. I think that's going to be huge. Rebel Moon and All the Light We Cannot See, it's a great drama. So many great shows, docs, reality, you name it, it's coming. So that was the other big thing, to share all the shows and films that advertisers want. For next year, what do you want to continue? What do you want to do differently?Looking forward, I think we learned one thing is advertisers appreciate a crisp presentation. They appreciate hearing from our executives, so we're going to continue to bring [them] out. We had both CEOs, the Chief Content Officer, etc. And if anything, next year, I anticipate we'll have a lot more of the talent that's onscreen talking about our business as well. That's a time-honored ritual that we will come back on next year when the circumstances are different. Is there anything you can share about early negotiations?Demand is strong. I can share that. And products that we announced, like the Top 10 and the sponsorships, are getting a lot of attention. One of the things that I enjoyed last week, every single meal was with a customer. That's what we do. And so many of my conversations talked about advertisers' desire to be culturally relevant. And I think that Top 10 product, in particular, is a way for advertisers in their campaigns to be nestled into the most popular content streaming anywhere. Year-to-date, we've had the No.1 streaming show 15 out of 16 weeks and the No.1 movie for 14 weeks. And when you bring a product like Top 10 and sponsorships, that's what advertisers are excited about for these upfront negotiations. So things are going well. Demand is strong and the products we announced are coveted. So I feel good about it so far. Is there a message that you wanted marketers to take away from the event?Just that it's now possible to work with us. I think there's been so much anticipation for the idea of Netflix having an ad-supported audience. And good news: We're here, and let's get busy. So will Netflix be back next year for upfront week? If so, will it be in-person? And in that Wednesday evening slot?We will absolutely do something next year, and we'll have to decide if virtual will be a repeat or in-person. I think we had a very successful upfront event, but we'll see. We'll definitely be back. Let's leave it at that.

TV Upfronts

Netflix's Peter Naylor on How the Streamer Shifted to a Virtual Upfront Event

Plus, the 'happy ripple effect' of having its ad-tier news boost the company’s stock

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