Netflix’s ad-supported tier has soared to 70 million monthly active users globally, nearly doubling its user base in just six months and signaling a significant shift in streaming consumption patterns.
It’s weird, given how so many people have boycotted the platform over its Woke programming for so many years.
At a Glance
- Netflix’s ad-supported tier reaches 70 million monthly active users globally
- Over 50% of new Netflix sign-ups are for the ad-supported plan in available countries
- Netflix to broadcast NFL Christmas Day doubleheader in 2024
- Company developing in-house ad technology to reduce reliance on third-party solutions
- Ad-supported tier priced at $7 a month in the U.S., driving significant subscription growth
Rapid Growth in Ad-Supported Viewership
Netflix’s budget-friendly ad-supported subscription model has experienced remarkable growth, reaching 70 million monthly active users worldwide. This surge represents a near doubling of its user base in just six months, highlighting the increasing appeal of more affordable streaming options. The ad-supported tier, priced at $7 a month in the U.S., now accounts for over half of new sign-ups in regions where it’s available.
The streaming giant has added over 35 million subscribers in the past year, with the ad-supported plan playing a crucial role in this growth. Despite this success, Netflix plans to stop reporting subscriber numbers by 2025, shifting focus to other metrics of success.
It turns out making things cheaper can keep people on board – even if they were planning to boycott the platform.
Expansion into Live Sports
In a strategic move to diversify its content offerings, Netflix is venturing into live sports broadcasting. The company will debut its sports coverage with an NFL Christmas Day doubleheader in 2024. This expansion into live sports is expected to attract new subscribers and retain existing ones, particularly sports enthusiasts who have traditionally relied on cable or other streaming services for such content.
“There has been continuous momentum over the last two years, but we’re just getting started and can’t wait to see what’s to come,” Amy Reinhard said.
The company has already sold out in-game ad inventory for these NFL games, with partners like FanDuel and Verizon securing spots. FanDuel has been signed as an exclusive pre-game sports betting partner for the Christmas Day NFL games, indicating Netflix’s intent to capitalize on the growing sports betting market.
Advancing Ad Technology and Measurement
Netflix is making significant strides in developing its in-house advertising technology. Canada has already begun using Netflix’s proprietary ad tech, moving away from its partnership with Microsoft. The company plans to roll out programmatic ad tools in the U.S., Brazil, Canada, and Mexico, with Europe gaining access in February 2025.
“As we continue developing our ad tech, we look forward to introducing enhanced forecasting capabilities and new targeting, reporting, measurement and insights,” Reinhard also said.
To enhance its ad measurement capabilities, Netflix has partnered with Nielsen to measure viewership for its NFL games and VideoAmp for WWE’s Monday Night Raw, which will debut on the platform in January. The company is also expanding its relationship with Barb in the U.K. to study ad-supported tier viewing behavior, demonstrating its commitment to providing advertisers with accurate and comprehensive data.
The success of the ad-supported tier is closely tied to Netflix’s strategy of encouraging customers to pay for password sharing. Many users who previously shared accounts are opting for the Basic with Ads subscription, which offers a more affordable entry point to the service. This approach has allowed Netflix to monetize a segment of viewers who might otherwise have continued to use shared accounts.
While the company does not currently provide detailed financial performance for the ad-supported plan, analysts suggest that Netflix could potentially raise prices on ad-free options to further encourage users to choose the ad-supported tier. This strategy could help drive additional revenue growth in the coming years, as Netflix does not expect the ad-supported plan to significantly impact its financial performance until 2026.
