Netflix is proud that its ad-supported tier now boasts 70 million users worldwide, according to Variety. In May, the company announced 40 million users, so this is real growth. The streaming service has been slowly increasing its advertising tier since 2022.
Amy Reinhardt, president of advertising at Netflix, says that the company continues to “see steady progress across all participating countries.” She also noted that more than 50 percent of new Netflix subscriptions are coming from these ad-supported plans. The transformation of streaming into regular television is almost complete.
There is one big potential caveat. The company has published the aforementioned data on new signups, which is impressive, but there is no information on existing customers. It’s quite possible that many people have moved from the premium level to the ad-supported level.
Many people don’t mind watching one or two commercials while mindlessly shoveling food into their stomachs while pseudo-watching the Diplomat or The Circle series. In other words, there is an argument to be made that the level supported by advertising can absorb more expensive offerings.
It could also be argued that this year’s jump in advertising segment growth could attract companies with larger advertising budgets, and thus offset the price difference. Netflix will be broadcasting live NFL games on Christmas Day and says it has already sold out of all available commercial resources. In fact, the streaming company is making a big bet on live broadcasts: wrestling competitions, cooking shows, and talk shows will soon be on the air. The company’s recent forays into audience measurement and advertising technology should help attract sponsors for these events.
Netflix even has plans for “themed” ads during certain shows. The next season of The Squid Game will feature a three-part commercial from Kia. Nothing makes me want to buy a car more than a deadly, gloomy, bloody sport that seems closer and closer to the real world every day.
