Netflix announced on Wednesday that its ad-supported tier has reached a milestone of 40 million global monthly active users, marking a substantial increase from 5 million users a year earlier. This surge signals the success of its strategy to attract new users with a more affordable plan.
The growth in subscribers comes amidst heightened competition in the streaming industry, prompting companies to introduce bundles with their rivals to retain subscribers.
Netflix introduced the ad-supported plan in November 2022, and since then, 40% of all sign-ups in countries where the plan is available have opted for it.
Data from research firm Antenna revealed that in the fourth quarter, the majority of gross subscriber additions in the streaming industry came from ad-supported plans for the first time.
In a bid to enhance its advertising capabilities, Netflix announced plans to launch an in-house advertising technology platform by the end of 2025. This platform aims to provide clients with new ad-buying methods and improve user engagement.
To accelerate automated ad buying, Netflix will collaborate with industry leaders such as Trade Desk, Google Display & Video 360, and ad-tech firm Magnite, who will join Microsoft in this endeavor.
Netflix’s ad-tier plan is priced at $6.99 per month, offering a more affordable option compared to other streaming services. For instance, Warner Bros Discovery’s streaming service Max charges $9.99 per month, while Walt Disney’s Disney+ is priced at $7.99 per month.
In response to the market dynamics, Comcast-owned streaming service Peacock announced last month that it would increase the prices of its plans, with its ad-supported plan set to rise to $7.99 per month.
Additionally, Netflix revealed plans to stream two National Football League games on Christmas Day this year, as part of its strategy to expand its live programming offerings on its streaming service.
The rapid growth of Netflix’s ad-supported tier underscores the company’s ability to adapt to evolving consumer preferences and its commitment to providing diverse and affordable entertainment options to users worldwide. – Reuters
