Netflix’s cheaper, ad-supported tier has gained significant traction, reaching 70 million global monthly active users since its launch two years ago. The company revealed that over 50% of new sign-ups are opting for the ad-supported plans in countries where the option is available. This growth has contributed to positive momentum and steady progress in all areas of the business, with a total of 282.7 million memberships across all pricing tiers.
In response to a slowdown in subscriber growth, Netflix implemented the ad-supported option in November 2022. However, recent reports show that subscriber growth is not an issue, as the company added 5.1 million subscribers in the third quarter, surpassing Wall Street estimates. Moving forward, Netflix plans to focus on revenue and other financial metrics as key performance indicators, shifting away from reporting subscriber numbers.
Netflix also announced partnerships with the NFL to air games on Christmas Day, with FanDuel and Verizon coming on board as advertisers. This aligns with a trend in the media industry, where companies are turning to ad-supported strategies for streaming services to attract customers with lower-priced plans and generate advertising revenue. Despite a slow traditional TV ad market, streaming and digital businesses have seen growth in ad revenue.
In addition to expanding its ad-supported tier, Netflix launched its own advertising platform and plans to roll it out in the U.S. by the end of the second quarter of next year, aiming to make it available globally by 2025. This strategic move showcases Netflix’s commitment to diversifying its revenue streams and capitalizing on the growing ad market in the streaming industry.
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