Netflix announced on Wednesday that its ad-supported subscription tier has surged to 40 million global monthly active users, up from 5 million a year ago, indicating successful traction for its strategy to attract new users with a more affordable plan.
This significant increase comes amidst intense competition in the streaming industry, with companies resorting to bundling offers with rivals to retain subscribers.
Introduced in November 2022, Netflix revealed that 40% of all new sign-ups are opting for the ad-supported plans in countries where they are available. In the fourth quarter, the majority of new subscriber additions in the streaming sector originated from ad-supported plans for the first time, according to data from research firm Antenna.
Netflix also disclosed plans to launch an in-house advertising technology platform by the end of 2025, aiming to provide clients with innovative ad-buying options and enhance user engagement.
In a bid to accelerate automated ad buying, the company announced partnerships with Trade Desk, Google Display & Video 360, and ad-tech firm Magnite, adding to its existing collaboration with Microsoft.
Netflix’s ad-tier plan is priced at $6.99 per month, offering a more budget-friendly option compared to competitors like Warner Bros Discovery’s Max ($9.99 per month) and Walt Disney’s Disney+ ($7.99 per month).
Meanwhile, Comcast-owned streaming service Peacock recently announced plans to raise prices, including its ad-supported plan which will increase to $7.99 per month.
Additionally, Netflix revealed its intention to stream two National Football League games on Christmas Day this year, as part of its efforts to expand its offering of live programming on its streaming service.
