A Netflix executive has said that the streaming service's ad-supported tier has over 23 Million users per month. The company says that user engagement on the ad-supported plan is high.
The streaming platform introduced the ad-supported tier in November 2022, in select regions. While analysts had expected the idea to backfire and cause subscribers to cancel their membership, the strategy proved to be a successful one.
It was not a smooth ride for the company, at least, not initially. Netflix increased the prices of its ad-free plans in some Countries, and several users had argued that the company had deliberately increased the cost of its ad-free plans to make its ad-supported plan more attractive. The streaming service also began imposing stricter rules in a bid to crackdown on password sharing among users. This resulted in a mass exodus of users leaving the platform, with as many as 1 Million users in Spain cancelling their subscriptions.
But, surprisingly, Netflix made a strong comeback. The ad-supported plan, which had less than one million subscribers in the U.S. in March 2023, grew to over 5 Million subscribers in May 2023. It didn't stop there. Netflix saw remarkable growth over the past year, accumulating nearly thrice the number of users, adding almost 9 Million new members in the third quarter. The ad-supported plan boasted 15 million monthly active users by November 2023. It appears that the service is still gaining momentum, as it has amassed 8 Million users in less than 2 months.
Netflix's president of advertising, Amy Reinhard, told Variety that the streaming service now has over 23 Million global monthly active users. The company had announced to its shareholders in October that the ad-supported subscription accounted for 30% of all new signups on the platform in all 12 Countries where it is available.
Reinhard says that user engagement is high on the ad-supported plan. 85% of users on Netflix's ad-supported plan stream videos for more than 2 hours per day. This is also beneficial for the company, as more viewers means it earns more revenue from advertising.
Netflix offers various games as part of its subscription, including many original games that are developed by its first-party studios. It even managed to rope in the Grand Theft Auto: Trilogy-The Definitive Edition, after partnering with Rockstar Games. Netflix is testing game streaming on TVs and computers, the feature has been in beta since August last year.
A recent report by The Wall Street Journal says that the streaming giant is working on ways to monetize its gaming platform. The company plans to introduce ads in games, and charge an extra fee for sophisticated games. We could potentially see in-app purchases in games too. The streaming service has invested over $1 billion for acquiring game studios, and its budget is set to increase as it moves towards console-quality games. These games could cost hundreds of millions of dollars, and is part of the reason why Netflix has had internal discussions about the possibility of charging for the games.
On a sidenote, if you are annoyed by the ads, you may want to take a look at Streaming Enhanced, an add-on for Firefox and Chrome that skips ads on Netflix, Disney, Prime Video and more.
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