Netflix’s Ad-Supported Plan Attracts 15 Million Subscribers in First Year

Netflix’s ad-supported tier now has 15 million global monthly active users, one year after the streaming platform launched the tier.

“We have built an incredible foundation, focusing on areas advertisers told us matter most, all while delivering unmissable entertainment at an unbeatable value,” Amy Reinhard, president of advertising at Netflix, wrote in a Wednesday (Nov. 1) blog post announcing the milestone.

The current count of 15 million subscribers for the ad-supported tier represents a threefold increase from the previous count disclosed in May, CNBC reported Wednesday.

The introduction of the ad-supported plan, coupled with a crackdown on password-sharing, has proven to be a lucrative strategy for Netflix, especially amidst slower subscriber growth, according to the report. The company continues to enhance the ad tier with new features for advertisers and users.

The rapid growth of subscribers in Netflix’s ad-supported tier highlights the success of the company’s strategy to diversify its revenue streams, the report said. By offering a more affordable subscription option supported by ads, Netflix has attracted a significant number of users. This growth has translated into positive financial results, with Netflix surpassing Wall Street expectations by adding 8.8 million subscribers in the third quarter. The company anticipates a similar surge in subscriber growth in the fourth quarter.

Netflix has introduced new features to its ad tier, allowing advertisers to run ads of varying lengths, including 10-, 20-, and 60-second spots, in addition to the existing 15- and 30-second formats, per the report.

The company will also offer higher streaming resolution and a feature that allows users to download movies and series to their devices, starting at the end of this week, according to the report.

Beginning in the first quarter of 2024, the company will reward users who binge-watch by presenting an ad-free episode after they watch three consecutive episodes of a series, the report said.

Netflix launched the ad-supported tier last year to offer consumers a lower price while bringing the streaming platform more members and an incremental revenue and profit stream.