It has now been a full year since Netflix shook things up by introducing a tier that includes advertising, available in a dozen countries for $7 a month. Now, just a couple weeks after the company’s third-quarter earnings report, Netflix is giving some details on how the ad-supported tier has worked out.
In a blog post penned by Netflix advertising president Amy Reinhard, the company says that it now has some 15 million global monthly active users on the ad-supported tier. The Q3 letter to shareholders noted that approximately 30% of new sign-ups were for the cheaper, ad-supported tier, up 70% quarter over quarter.
“We have built an incredible foundation, focusing on areas advertisers told us matter most, all while delivering unmissable entertainment at an unbeatable value,” Reinhard wrote. “As we continue to build and adapt our service, we’re excited about the progress we’ve made.”
Look for changes to come in the new year, too. Reinhard writes that a new “binge ad” format will actually benefit subscribers who just can’t quit, showing an ad-free episode after watching three in a row. Look for that by April.
You’ll also start to see QR codes in advertising in 2024 if you’re a U.S. subscriber.
“Our goal isn’t just to offer the same products and tools the industry has come to expect,” Reinhard continued, “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.”
Netflix’s ad-supported plan launched in November 2022 and quickly proved its worth. The company noted in its first-quarter earnings release that “our ads plan already has a total [average revenue per user] greater than our standard plan.” That Standard plan costs more than twice that of the ad-supported plan at $15.50 a month, but obviously doesn’t include any advertising revenue.
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