New York and Los Angeles (Reuters)-Netflix Inc (NFLX. O)
The streaming video pioneer, which revolutionized television, is investing in one of the oldest forms of media to gain an edge in the fierce battle for online audiences and top audiencesnotch talent.
Netflix is known for its well-received programs such as "stranger's things" and "Crown, it will soon have up to 20 buildings along the famous Sunset Boulevard in West Hollywood, as many people familiar with the matter told Reuters.
Netflix is already an important advertiser on billboards in the region, offering $0. 3 billion in April to buy Los Angeles-
Reuters previously reported that the Regent outdoor advertising.
Sources told Reuters that Netflix decided to buy only half of Regent's assets for $0. 15 billion, focusing on Sunset Boulevard, which is expected to end on July.
They added that the company is also considering acquiring other Hollywood film billboards, such as the Dolby Theater, the birthplace of the Academy Award.
A Netflix spokesman did not comment.
Lock in major ad inventory on busy Sunset Boulevard
Actors, writers and directors watch every day.
It is Netflix's latest move to show its strength as a major Hollywood producer and publisher.
The company plans to release about 700 original TV series, movies and other programs this year.
According to people familiar with the matter, the new strategy requires Netflix to use internal billboards and not rent space to other companies because the agreement has not yet been announced and they ask for anonymity.
This means advertising by competitors such as AT&T (T. N)
HBO and CBS (CBS. N)
A person familiar with the matter said that Showtime is currently promoting the show on the Regent's billboard in the area, and it will loop back once the deal is over.
This approach is different from CBS and other media companies that own billboards but rent them to other media customers.
Still, rival TV and filmmakers can still see dozens of billboards owned by other companies on Sunset Boulevard and elsewhere in Los Angeles.
Delegates from HBO and Showtime did not comment.
Advertising on billboards is part of Netflix's plan to spend $2 billion this year on marketing to help it grow its 0. 125 billion streaming customer base around the world.
Billboards must compete with digital ads and ads that people often stick to their phones instead of on the street.
However, advertisers are still interested in billboards, in part because they are hard to ignore by exclusive viewers on the car, and many will take pictures of them, post them on social media, and expand their reach.
In Hollywood, movie studios use billboards to attract talent and show their support.
According to a Hollywood executive, it helps attract filmmakers eager to focus on movies, which Netflix has only released in a limited number of theaters.
"This is a way to make you feel better, because your name, products and movies are getting the public exposure you want in some way," the executive said . ".
Over time, Netflix will save marketing money in transactions, as its price will never rise on these billboards, and it can recover transactions in a short period of time, the source said.
"It's totally economic," said Gino Sesto, owner and founder of Dash 2, a shop that buys outdoors for customers including Universal Music Group and sub-media.
Sesto said renting a billboard on Sunset Boulevard averaged about $25,000 a month.
For the billboard it owns, Netflix only needs to pay for replacing vinyl on the sign, which costs about $800 plus the lowest maintenance cost, he said.
In addition, Netflix will be more flexible in changing billboards during the month.
"Netflix has so many shows that they can wrap up a market for a show in a week and turn it off," he said . ".
Sesto says the value of billboards will appreciate over time, especially since the Los Angeles authorities rarely approve the construction of new billboards. Out-of-
According to Magna's global data, home advertising including billboards, bus shelters and other locations is the only traditional advertising platform in the United States that is expected to grow in 2018.
The media acquisition company is expected to launch 21.
9% increased to $8 billion.
Netflix can choose to upgrade a static Billboard to a digital signage that can play multiple video messages, or try to add other technologies.
Operators have been trying to make these logos interact with their phones and sometimes display personalized information.
Even if they have to find a new billboard operator on Sunset Boulevard, competitors can copy-
Cat move: the process of selling the rest of Regent's assets is still in progress.
A unit of Natixis SA in the United States-pu Solomon (CNAT. PA)
Netflix and Moelis suggest an outdoor Regent.
The legal counsel is Loeb & Loeb of Netflix and Manatt of Regent.
PJ Solomon, Moelis and Manatt declined to comment, while Loeb & Loeb did not respond to requests for comment on the deal.