Variety reports that Netflix touts that its ad-supported tier now boasts 70 million users worldwide. The company announced in May that it had 40 million users, so this is substantial growth. The streamer has been slowly ramping up its ad levels dating back to 2022.
Amy Reinhardt, Netflix’s president of advertising, said the company “continues to make steady progress in our membership base in all countries.” She also noted that over 50% of Netflix’s new subscriptions are on these ad-supported plans. The conversion from streaming to regular TV is almost complete.
There is one potentially major caveat. The company released the aforementioned data on new sign-ups. This is impressive, but there is no information about existing customers. It is very likely that many people have downgraded from the premium tier to the ad-supported tier.
I am one of them. I don’t mind seeing an ad or two while mindlessly stuffing food down my esophagus while pseudo-watching episodes of The Diplomat or The Circle. In other words, there is an argument that ad-supported tiers may be encroaching on more expensive services.
There’s also the argument that this year’s rapid growth in the ad-supported segment could attract companies with deeper ad spending budgets to close the gap. Netflix is broadcasting live NFL games on Christmas, but all available commercial inventory has already been sold out. In fact, the streamer is betting big on livestreams, with pro wrestling events, cooking shows, and talk shows all set to air in the near future. The company’s recent foray into audience measurement and ad tech should help attract sponsors for these events.
Netflix also plans to run “themed” ads with certain shows. The next season of Squid Games will include a three-part interlocking commercial by Kia. Nothing makes me want to buy a car more than a dangerous dystopian blood sport that seems to be getting closer and closer to the real world by the day.
