Netflix’s ad tier has reached 40 million monthly active users globally, up from 5 million a year ago, with over 40% of the streamer’s new sign-ups coming from the plan in the countries where it’s available, the streamer announced Wednesday.
Over 70% of the company’s ad-supported members watch content for more than 10 hours per month — 15 percentage points higher than the nearest competitor, according to Nielsen data provided by Netflix.
The company noted that users also pay more attention three hours into what they are watching compared to when they first start and, as a result, are twice as likely to respond to an ad compared to other streaming services and linear TV.
The latest milestone for the ad-supported tier was revealed by Netflix Advertising president Amy Reinhard during the company’s upfront presentation.
In addition to the latest disclosures, Netflix revealed it would bring its advertising technology in-house with the launch of a new platform, letting go of its tech partnership with Microsoft, to provide advertisers with new ways to buy and measure impact and new insights to leverage. The streamer will begin testing its ad tech platform in Canada this year and plans to launch it in the U.S. by the end of the second quarter of 2025, with plans for it go live globally by the end of next year.
“Bringing our ad tech in-house will allow us to power the ads plan with the same level of excellence that’s made Netflix the leader in streaming technology today,” Reinhard said.
This summer, The Trade Desk, Google’s Display & Video 360 and Magnite will also join Microsoft as Netflix’s main programmatic partners for advertisers.
“We’re being incredibly strategic about how we present ads because we want our members to have a phenomenal experience,” Reinhard added. “We conduct deep consumer research to make sure we stay ahead of the competition, bringing opportunities that are better for members and better for brands.”
Netflix’s latest advertising efforts come as the company faces stiff competition in the ad-supported streaming space from Disney+, which recently reached 22.5 million ad tier subscribers, and Prime Video, whose recently launched ad-supported offering reaches more than 200 million monthly viewers, including 115 million in the United States.
Despite a slower than expected start in its ad tier, Netflix boasts a total of 269.6 million subscribers globally as of the end of its first quarter of 2024.
Starting in the first quarter of 2025, the company will stop disclosing its quarterly subscriber figures, as well as its average revenue per paid member. However, Netflix said it would to provide a breakout of revenue by region, as well as the impact of foreign exchange. Future guidance will consist of annual revenue guidance, annual operating margin and forecasts for free cash flow, quarterly revenue, operating income, net income and earnings per share. It will also announce major subscriber milestones as it crosses them.
