Netflix, which once stood apart for its ad-free model, now celebrates 70 million monthly users on its ad-supported tier—a significant milestone just two years after launching the plan. The growth in this tier marks a strategic shift for Netflix, which now reports that more than half of its new subscribers in ad-tier markets are opting for the lower-cost, ad-supported plan. This boost builds on a reported 40 million monthly ad-supported users in May, underscoring the strong upward momentum in ad-tier adoption.
Since launching its ad-supported plan in November 2022, Netflix has expanded the tier’s availability to multiple regions, including the US, UK, Japan, and others. Alongside its competitive $6.99 monthly price, the streamer has added premium features to make the ad-supported plan more attractive, such as higher resolution and simultaneous streaming for multiple devices. Netflix also took steps to steer more users to the ad tier by removing its lowest-cost ad-free plan, emphasizing the affordability and value proposition of its ad-supported offering.
The development of Netflix’s proprietary ad technology underscores the company’s investment in this model. Already active in Canada, the platform is set to go global by the end of 2025, replacing its initial ad-tech partnership with Microsoft.
Additionally, Netflix’s moves into live programming, like this year’s NFL games on Christmas Day, align with the ad-supported structure by securing sold-out ad spots, including sponsorships with FanDuel and Verizon. This approach adds a new revenue stream, which is especially valuable in emerging markets where Netflix’s ad-free tiers may be less accessible due to higher prices.
In financial terms, Netflix has noted that ad-tier subscribers yield higher average revenue per user than some ad-free plans, bolstering the platform’s ability to monetize beyond subscription fees. The company aims to double its ad revenue by 2025, with analysts projecting that ad-supported earnings could reach over $3 billion next year and account for 10% of Netflix’s overall revenue by 2026.
This ongoing shift toward an ad-supported model echoes broader industry trends. Streaming providers increasingly see ad revenue as a means to achieve profitability while offering viewers affordable choices. As Netflix gears up to retire subscriber count updates, the focus will likely shift to revenue and engagement metrics highlighting the platform’s financial and strategic growth.
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