Netflix's ad-supported tier reaches 15 million users a year after launch
Netflix recently raised subscription prices for select streaming plans in the United States, Britain, and France.
Netflix reported that its ad-supported tier now boasts 15 million active users per month. The company had five million monthly ad-tier users in May, and it has been increasing prices for its ad-free options to encourage more subscribers to opt for the ad-supported tier, which generates higher revenue per user.
Netflix recently hiked subscription prices for certain streaming plans in the United States, the United Kingdom, and France, after its third-quarter addition of nine million subscribers exceeded Wall Street expectations. In April 2022, Netflix made a significant shift by introducing ads to its platform after losing subscribers in the first quarter of the year. Disney+ followed suit a month after Netflix launched its ad-supported plan, as it sought to drive its streaming business toward profitability.
The trend of ad-supported tiers among streaming services is gaining traction, with HBO Max, Paramount+, and Peacock adopting similar models. Amazon's Prime Video also plans to introduce ads next year while offering a higher-priced ad-free tier.
According to Netflix's third-quarter results, the adoption of its ads plan, priced at $6.99 per month in the United States, is continuously growing, with membership increasing by nearly 70% sequentially. Additionally, in countries where the ad plan is available, 30% of sign-ups are opting for the ad-supported tier.