Netflix (NASDAQ:NFLX) announced on Wednesday that its ad-supported tier has reached 40 million global monthly active users, marking a significant increase from 5 million users a year earlier. This growth underscores the success of Netflix’s strategy to attract new subscribers with a more affordable plan.
The surge in users comes amidst fierce competition in the streaming industry, with companies increasingly offering bundles with their competitors to retain subscribers. Netflix introduced its ad-supported plan in November 2022, and since then, 40% of all sign-ups in countries where it’s available have come from these plans.
Data from research firm Antenna revealed that in the fourth quarter, the majority of gross subscriber additions in the streaming industry stemmed from ad-supported plans for the first time.
Netflix also announced plans to launch an in-house advertising technology platform by the end of 2025, aiming to provide clients with new ad-buying options and enhance user engagement. The company will collaborate with Trade Desk, Google Display & Video 360, ad-tech firm Magnite, and Microsoft to accelerate automated ad buying.
Netflix’s ad-tier plan is priced at $6.99 per month, offering a cheaper alternative compared to Warner Bros Discovery’s streaming service Max at $9.99 per month and Walt Disney’s Disney+ at $7.99 per month. Comcast-owned streaming service Peacock recently announced a price increase for its plans, raising its ad-supported plan to $7.99 per month.
In addition to its ad-supported growth, Netflix revealed its plan to stream two National Football League games on Christmas Day this year, highlighting its commitment to expanding live programming offerings on its streaming platform.
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