Netflix’s ad-supported tier, introduced in November 2022 across 12 markets, including the United States, has rapidly gained popularity, signaling a strategic move by the streaming giant to attract a broader audience and diversify its revenue streams.
According to Variety magazine’s report, the ad-supported tier has now garnered more than 23 million global active users per month. Amy Reinhard, Netflix’s advertising chief, revealed these impressive figures at the Variety Entertainment Summit during CES 2024 at Las Vegas’ Aria Resort and Casino.
Initially launched to combat the intensifying competition for online viewers, the ad-supported plan has proven successful, reaching a milestone of 15 million active users per month within its first year. Netflix’s proactive approach includes adjusting prices on its ad-free options, encouraging subscribers to explore the tier featuring commercials, ultimately boosting revenue.
Reinhard highlighted a significant statistic, stating, “Of Netflix’s customers on ad-supported plans, 85% stream on the platform for more than two hours per day.” This emphasizes the engagement levels and appeal of the ad-supported model to a substantial portion of Netflix’s user base.
In an interesting development, an Insider Intelligence report predicts that Netflix is positioned to surpass Disney+ in the U.S. advertising race next year. This projection attributes the shift to both price hikes and a crackdown on password-sharing, drawing more viewers towards Netflix’s ad-supported plan.
As Netflix continues to evolve its strategies, the success of the ad-supported tier showcases the streaming giant’s adaptability in an ever-changing digital landscape. The numbers speak for themselves, affirming the growing preference for a model that seamlessly blends content and advertising on the popular streaming platform.