Netflix’s ad-supported tier, which launched in 2022, is proving a big hit with subscribers.
The streaming giant revealed on Wednesday that its ad tier has grown to 40 million monthly users globally, which is a significant chunk of its 270 million members. It took the ad plan six months to reach 5 million users before growing to 23 million subscribers in January.
Netflix also revealed that more than 40% of new users are signing up for the ad-supported tier in locations where it’s available.
Netflix’s “standard with ads” tier costs $7 a month and does what it says on the tin, serving up a few messages from brands during a TV show or movie. Those who want to go without interruptions have to fork out more than double, with the “standard” tier, which lets you watch on two supported devices in Full HD, costing $15.5o a month. And finally there’s the “premium” tier (four supported devices in Ultra HD) costing $23 a month.
After Netflix launched its ad tier in November 2022, its big rival, Disney+, followed suit just a month later and launched its own ad-supported plan. Peacock, on the other hand, scrapped its free, fully ad-supported tier for new customers in early 2023 and replaced it with an ad-free option at $10 a month and an ad-supported alternative at $4.99, though the fees have since risen to $12 and $6, respectively, and will rise again in July. Amazon Prime Video has also launched ads, while Apple TV+ has declined to take the same route, though it does offer a free trial so that you can get a taste of what it offers before you hand over any cash.
“While striving toward profitability amid rising content costs, streaming services have prioritized ad-supported tiers, which tend to generate more revenue per user than ad-free tiers,” eMarketer noted earlier this year, adding that Netflix and Disney+ are expected to grow their ad-supported plans the most among the current crop of streaming platforms.
