Netflix’s Ad-Supported Plan Reaches 40 Million Monthly Active Users, Company Reports

Netflix Plans to Launch In-House Advertising Technology Platform by Late 2025

Netflix announced on Wednesday that its ad-supported tier has reached an impressive milestone of 40 million global monthly active users, a significant increase from just 5 million a year earlier. This surge highlights the success of Netflix’s strategy to attract new users with a more affordable subscription option.

This remarkable growth comes amidst intense competition in the streaming industry, where companies are vying for subscribers by introducing various bundles and partnerships with rivals. The competitive landscape has pushed streaming platforms to innovate and offer diversified plans to retain and expand their user base.

Netflix launched its ad-supported plan in November 2022, targeting cost-conscious consumers who are willing to watch ads in exchange for a lower subscription fee. This plan has proven to be a popular choice, with 40% of all new sign-ups in regions where the ad-supported tier is available opting for this plan.

The ad-supported model not only broadens Netflix’s subscriber base but also opens up new revenue streams through advertising. This dual approach allows Netflix to cater to different segments of the market, balancing between those who prefer an ad-free experience and those looking for a budget-friendly option.

In addition to its growing subscriber base, Netflix has announced plans to enhance its advertising capabilities further. By the end of 2025, the company intends to launch an in-house advertising technology platform. This move aims to streamline its advertising operations and potentially increase ad revenue by leveraging proprietary technology.

Overall, Netflix’s ad-supported tier’s rapid growth and the planned launch of an in-house ad tech platform signify the company’s adaptive strategies in a highly competitive market. These efforts are designed to sustain its leadership position in the streaming industry while providing diverse options to meet the varied preferences of its global audience.

Last month, Comcast-owned streaming service Peacock said it would raise prices of its plans, that would take its ad-supported plan to $7.99 per month. Earlier on Wednesday, Netflix said it would stream two National Football League games on Christmas Day this year, doubling down on efforts to add more live programming to its streaming service.