Netflix's ad-supported plan is proving to be a major success, as the company recently announced it has surpassed 23 million global monthly active users.
This represents a major increase from the 15 million users reported just two months ago, and it shows that viewers are willing to watch ads in exchange for a lower price.
Netflix introduced its "Basic With Ads" tier in November 2022, offering viewers across the U.S. and 11 other countries a cheaper way to stream.
Priced at $6.99/month in the U.S., it's a steal compared to the Standard plan's $15.49 monthly cost.
Netflix is Scaling with Meaningful Engagement in Mind
In a presentation at the Variety Entertainment Summit at CES 2024, Netflix Advertising President Amy Reinhard said the company was excited about the engagement with its ad tier.
"Scaling our business is our biggest priority right now, but we want to make sure we're doing that in a meaningful way for the members," Reinhard explained.
Reihnard revealed that 85% of the subscribers on the ad tier are streaming for more than two hours per day, which indicates that they are finding value in the service.
Of course, there are still some challenges ahead for Netflix's ad-supported plan:
- Ensuring that the ads are relevant and engaging for viewers
- Convincing advertisers that Netflix is a worthwhile platform to reach their target audience
"We know there's a lot of work to do on our side, but we're all about learning and iterating and working with our advertising partners to figure out how do we grow this business in a meaningful way," Reinhard pointed out.
If Netflix can overcome these challenges, then its ad-supported plan could become a major driver of growth for the company in the future.
Although it remains to be seen whether Netflix's ad-supported plan can continue to grow at its current pace, it is certainly off to a great start.
