Netflix’s Ad Tier Hits 15 Million Active Monthly Users
By Movieguide® Contributor
Since rolling out its ad-tier subscription, Netflix has garnered 15 million users on the less expensive plan.
“We have built an incredible foundation, focusing on areas advertisers told us matter most,” said Amy Reinhard, President of Advertising at Netflix. “Our goal isn’t just to offer the same products and tools the industry has come to expect – although we’ve made a lot of progress on that front over the last year. It’s to build something bigger and better than what exists today.”
Along with serving traditional ads to viewers on the ad-tier plan, working with advertisers has led to some interesting collaborations with Netflix IPs. Frito-Lay specifically became a sponsor of LOVE IS BLIND recently, with the brand’s logo being incorporated onto the title card of the show. SQUID GAME: THE CHALLENGE and the final season of THE CROWN are set to have similar deals.
Branding with T-Mobile and Nespresso has also been vital in funding the upcoming Netflix Cup, which will be Netflix’s first attempt at live sports when it streams later this month.
The streaming service is also leaning into its binging strategy, rewarding ad-tier subscribers who binge shows by providing them access to ad-free episodes after they watch a certain number in a row. This policy will go into effect early next year.
While Netflix had vehemently stated it would never introduce ads onto its site for its first 20-plus years, it was forced to reconsider in 2022 when Wall Street devalued its stock by over 30% after a quarter where the platform lost subscribers. Going back on its word, the company also began cracking down on password sharing, promoting the ad-tier plan as a company-approved alternative.
Although these abrupt changes in strategy were met with widespread public backlash, the move has proven successful and emboldened other platforms to follow suit. Disney+ announced earlier this year that they would follow the same path, introducing an ad tier while cracking down on password sharing.
Movieguide® previously reported:
While many worried about what cracking down on password sharing would mean for Netflix, the change has resulted in millions of new subscription sign-ups.
Since limiting account users to those living in one household, Netflix has seen a significant rise in new member sign-ups, many of whom are opting for the new ad-tier subscription level. According to research group Antenna, around 23% of users who signed up in July chose the cheaper option.
“The company estimated that more than 100 million households had shared their log-in credentials with friends and family outside their homes. This has led analysts to expect that about 50 million users will ultimately create their own accounts,” Reuters reported.
In total, Netflix added 2.6 million new users in July, building on its already industry-dominant 238.39 million subscriber count. In June—the first full month since the password-sharing crackdown—just under 3.5 million new accounts signed up with the platform, more than doubling what the streaming service saw the previous month.
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