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 $6.99 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 (watch on two supported devices in Full HD) costing $15.49 a month. And finally there’s the “premium” tier (four supported devices in Ultra HD) costing $22.99 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 $9.99 a month and an ad-supported alternative at $4.99, though the fees have since risen to $11.99 and $5.99, 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 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.
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