Streaming Giant Sees Explosive Growth in Ad-Supported Tier
In a remarkable display of adaptability, Netflix’s cheaper, ad-supported plan has reached a staggering 70 million global monthly active users just two years after its launch. This milestone marks a significant shift in the company’s strategy, as more than half of its new sign-ups now opt for ad-supported plans in countries where the option is available.
A Shift in Focus
Netflix’s decision to introduce the ad-supported tier in November 2022 was a response to slowing subscriber growth. However, the company has since seen a remarkable turnaround, with 5.1 million new subscribers added in the third quarter alone. This brings the total number of memberships across all pricing tiers to 282.7 million.
New Metrics for Success
In a move to focus on revenue and other financial metrics as performance indicators, Netflix will no longer provide updates on subscriber numbers starting next year. This shift in focus reflects the company’s confidence in its ability to drive growth through innovative strategies.
Ad Platform Takes Off
When Netflix launched its ad platform two years ago, it partnered with Nielsen to rate its content. The company has since made significant strides, including the announcement of a three-year deal to air National Football League games on Christmas Day. The ad inventory for these live games has been completely sold out, with FanDuel and Verizon coming on board as advertisers.
A New Era for Streaming
Media companies are increasingly turning to ad-supported strategies to woo customers with cheaper plans and generate additional revenue. While traditional TV ad markets have slowed, streaming and digital businesses have seen significant growth. Netflix’s success in this area is a testament to its ability to adapt and innovate in a rapidly changing landscape.
Expanding Ad Capabilities
Netflix’s ad-supported tier has seen remarkable growth, with 40 million global monthly active users reported in May. The company plans to launch its own advertising platform in the U.S. by the end of next year’s second quarter, with a global rollout expected by the end of 2025.
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