Netflix’s Cheaper Plan With Ads Has 5 Million Monthly Active Users

Netflix has announced that its ad-supported streaming tier, launched last November, has reached nearly five million monthly active users.

During the company’s first Upfront presentation on Wednesday, Netflix disclosed figures for the new tier, which was conceived to attract a greater number of customers and offer a more accessible pricing option as competition within the streaming market continues to increase.

The basic ad-supported plan is currently priced at $7 per month and represents a reduced-cost alternative to Netflix’s standard offerings that start at $10 per month.

In late March, Bloomberg reported that the ad-supported tier hit 1 million subscribers after a slow start.

During the recent presentation to advertisers, the streaming giant focused on the breadth and diversity of its programming in an effort to secure greater ad commitments.

Rivals including Walt Disney, Comcast Corp, and other companies are also vying for digital ad dollars.

Netflix Enjoys Massive User Base Despite Ads

Despite the introduction of advertising on Netflix, the company still enjoys a substantial user base of paying subscribers. As of the end of March, it had 232.5 million paying subscribers worldwide.

Netflix has become known for its original content across a range of genres and from a variety of countries, including the sci-fi series Stranger Things, the Korean drama Squid Game, and the upcoming action movie sequel Extraction 2.

“No other entertainment company aspires to create great movies and shows across so many genres in so many countries, and for such a broad, diverse audience,” said Bela Bajaria, chief content officer for Netflix.

Netflix executives have been keen to emphasize the benefits of advertising on a digital platform, with co-Chief Executive Ted Sarandos noting that new types of advertising could be created.

For example, a 30-minute commercial could be spread over several days, with a story unfolding each time a viewer watches a show on Netflix. This is something that would not be possible on linear television, as people do not typically stay loyal to a single channel.

During its presentation, Netflix also expressed a desire to work closely with advertisers to develop these new forms of advertising.

The executives stated that they aimed to create advertisements that would enhance the viewing experience for consumers, rather than interrupting it.

Netflix’s Password-Sharing Crackdown is Imminent

Netflix has started a crackdown on password sharing as the company explores new ways to add more customers.

In its Q1 2023 shareholder letter, the world’s largest streaming service confirmed that it will start a “broad roll out” of its Netflix password-sharing crackdown plan in the second quarter of the year.

As part of the plan, any ‘Netflix freeloaders,’ individuals who use a friend or family member’s Netflix account for free and, most importantly, live in another household, won’t be able to access that account after June 30.

The announcement comes a few months after Netflix trialed its password-sharing crackdown plan in Canada, New Zealand, Spain, and Portugal.

In its latest letter to shareholders, Netflix acknowledged that, just like during its trial in Latin America in 2022, there was initially a loss of subscribers in these four countries after the implementation of the company’s password-sharing crackdown.

However, the company saw an increase in new paid subscribers, as well as a rise in “extra members” subscription packages.

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