Netflix’s Ad-Supported Tier Surges to 40 Million Users, Plans Independent Ad Tech Platform

Netflix's Ad-Supported Tier Surpasses 23 Million Global Users Monthly, Accelerating Growth

Key Points:

  • Netflix’s ad-supported tier reaches 40 million global monthly active users. Netflix will launch its ad tech platform and end its exclusive partnership with Microsoft.
  • A new ad tech platform will be tested in Canada this year and launched in the U.S. by mid-2024. Netflix will stream NFL games on Christmas Day.
  • The ad-supported plan has become a significant growth driver, with 40% of new signups choosing this option.
  • Despite economic challenges affecting traditional media and advertising markets, Netflix continues to lead in the streaming industry.

Netflix’s ad-supported tier has reached 40 million global monthly active users, nearly double the 23 million reported in January. In a major strategic shift, Netflix announced it will launch its advertising platform and move away from its partnership with Microsoft for ad technology. While Microsoft will continue as a programmatic advertising partner, Netflix will also collaborate with The Trade Desk, Google Display & Video 360, and Magnite.

Netflix plans to test its ad tech platform in Canada later this year. A U.S. launch is expected by the end of the second quarter of 2025, and a global rollout is expected by the end of that year. These announcements were made during Netflix’s Upfront presentation, which aimed to attract advertisers.

Earlier, Netflix revealed a deal to stream two National Football League (NFL) games on Christmas Day this year, with the potential for one or two games in future years. This marks Netflix’s first significant venture into live sports. The NFL deal, reportedly costing Netflix around $75 million per game, includes hiring its announcers and partnering with production companies. Co-CEO Ted Sarandos believes the NFL aligns with Netflix’s event strategy, allowing the platform to dominate the day.

Netflix introduced its ad-supported subscription plan in November 2022 to boost revenue amidst slowing subscriber growth. This strategy included cracking down on password sharing and eliminating its cheapest commercial-free plan in the U.S. and U.K. Currently, 40% of new signups in regions offering the ad-supported plan choose this option. Netflix now boasts 270 million total subscribers.

Disney+ has 117.6 million global subscribers, and Warner Bros. Discovery’s streaming unit, led by Max, has 99.6 million. Both companies recently announced a streaming bundle to retain subscribers and improve profitability. Competitors like Comcast’s Peacock and Paramount+ have 34 million and 71 million subscribers, respectively.

Netflix focused on its ad-tier user figures after the company informed investors it would no longer provide quarterly subscriber updates, emphasizing that profitability and free cash flow are more critical metrics. This move reflects Netflix’s leadership in the streaming sector as traditional media companies face challenges in making their platforms profitable.

Legacy media companies have struggled with a soft advertising market due to economic uncertainties, but digital and streaming advertising is rebounding. Despite these challenges, Netflix has solidified its position as the leader in streaming, earning praise from Disney executives who called it the “gold standard” of streaming.

TechGolly editorial team led by Al Mahmud Al Mamun. He worked as an Editor-in-Chief at a world-leading professional research Magazine. Rasel Hossain and Enamul Kabir are supporting as Managing Editor. Our team is intercorporate with technologists, researchers, and technology writers. We have substantial knowledge and background in Information Technology (IT), Artificial Intelligence (AI), and Embedded Technology.

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