When Netflix introduced its ad-supported tier in late 2022, it wasn’t exactly a surprise. Other mainstream streaming services had been widely adopting the strategy, much to viewers’ protests.
Now, Netflix has shared some data that indicates that while many might object to an ad-supported tier, they’re watching it anyway.
20 million new monthly active users
Netflix says its ad-supported tier now has 94 million monthly active users, up more than 20 million since last November.
That’s a massive leap in just six months, signaling that price-conscious viewers might be flocking to the cheaper plan, which currently costs $7.99/month (compared to $17.99 for the lowest ad-free option).
According to Amy Reinhard, the company’s president of advertising, the ad model isn’t just working. It’s actually outperforming expectations. “When you compare us to our competitors, attention starts higher and ends much higher,” she said.
Reinhard also claimed that viewers are engaging with mid-roll ads just as much as they do with the content itself, although it wasn’t clear how Netflix measured this data point.
Netflix added that the ad-supported tier now reaches more U.S. viewers aged 18 to 34 than any broadcast or cable network. A clear signal to advertisers that Netflix is no longer just competing with streamers, but with traditional TV itself when it comes to this demographic.
Up next
Netflix’s numbers may be the clearest signal yet that ad-supported streaming actually works. At least, for streamers. With nearly 100 million users now engaging with ads, other platforms might feel more encouraged to follow suit more aggressively.
Disney+, HBO Max, Peacock, and other mainstream streaming services already offer cheaper ad tiers. Still, as subscriber growth slows, they might resort to a more heavy-handed approach, now that Netflix has signaled there’s a large and willing audience (and real ad revenue) waiting on the other side.
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