Netflix announced Tuesday that its ad-supported tier has become a runaway success, attracting 70 million global monthly active users just two years after its launch. This cheaper subscription option, introduced in November 2022 to combat slowing subscriber growth, has quickly gained traction, with over half of new Netflix sign-ups opting for the ad-supported plan in countries where it’s available.
The streaming giant expressed strong satisfaction with the performance of its ad-supported tier, noting “positive momentum and growth across all areas of the business.” This success comes on the heels of a strong third quarter, where Netflix exceeded Wall Street expectations by adding 5.1 million subscribers, bringing its total membership across all tiers to an impressive 282.7 million.
This comes as cord cutters are looking for cheaper options for streaming. To do this, many are willing to accept ads in exchange for savings on their monthly bills.
Looking ahead, Netflix plans to shift its focus from subscriber numbers to revenue and other financial metrics as key performance indicators. This strategic move reflects the company’s growing emphasis on profitability and the evolving landscape of the streaming industry.
In a bid to further boost its advertising revenue, Netflix has secured exclusive rights to air two National Football League games on Christmas Day this year. The company revealed that it has already sold out all ad inventory for these live games, with FanDuel and Verizon joining the roster of advertisers. FanDuel will be the exclusive pregame sportsbook betting partner, further solidifying Netflix’s foray into live sports broadcasting.
The success of Netflix’s ad-supported plan underscores a broader trend in the media industry, with streaming services increasingly embracing ad-supported models to attract cost-conscious consumers while generating valuable advertising revenue. While traditional TV advertising faces challenges, the digital and streaming ad market continues to thrive, offering new avenues for growth and profitability.
Netflix’s ad-supported tier has experienced remarkable growth, nearly doubling its user base from 40 million in May to 70 million today. The company also recently launched its own advertising platform, ending its partnership with Microsoft, and plans to expand its reach globally by the end of 2025. This strategic move positions Netflix to capitalize on the burgeoning digital advertising market and solidify its position as a leader in the evolving streaming landscape.