It’s now been a full year since Netflix made a breakthrough by introducing tiers that included ads. It is available in many countries for $7 per month. Now, just weeks after the company’s third-quarter earnings report, Netflix is providing some details about how its ad-supported tier will work.
In the a blog post written by Netflix president of advertising Amy Reinhard, the company said it now has about 15 million global monthly active users on an ad-supported tier. The third-quarter letter to shareholders noted that about 30% of new signups were for the cheaper, ad-supported tier, up 70% quarter-over-quarter.
“We’ve built an incredible foundation, focusing on the areas advertisers say are most important to us, while delivering can’t-miss entertainment at unbeatable value,” Reinhard wrote. “As we continue to build and adapt our services, we are pleased with the progress we have made.”
Look for changes to come in the new year as well. Reinhard wrote that the new “binge ad” format would actually benefit subscribers who can’t quit a series by showing ad-free episodes after they’ve watched three episodes in a row. Look for it in April.
You will also start seeing QR codes in ads in 2024 if you are a US customer.
“Our goal is not just to offer the same products and tools that the industry expects,” Reinhard continued, “although we have made a lot of progress in this regard over the past year. This is to build something bigger and better than what exists today.”
The ad-supported Netflix plan launched in November 2022 and quickly proved its worth. The company noted in its first-quarter earnings release that “our advertising plans already have greater total (average revenue per user) than our standard plans.” The Standard plan costs more than double the price of the ad-supported plan at $15.50 per month, but does not include any ad revenue.