Five million people watch Netflix’s ad-laden service every month

In the first months of the year, roughly one million American subscribers were able to watch Netflix content interrupted by commercials in exchange for the streaming giant offering them entertainment at the most favorable price, Bloomberg wrote at the end of March, citing internal data from the company. The world’s most popular SVOD provider introduced a new subscription model costing $6.99 per month in November last year, which at the time seemed to get off to a slower start than expected.

The streaming giant released official numbers for its new subscription tier for the first time at a presentation to advertisers on Wednesday, revealing that the cheaper ad-studded package has five million monthly active users (MAUs) globally six months after its launch. However, since multiple users can share the same account for the time being, the MAU may not reflect the real number and may change in light of how the provider’s account sharing restrictions are adapted worldwide.

In Wednesday’s announcement, Netflix added that the subscriber base of the ad-supported package has more than doubled since the beginning of the year, and the service has a total of 232.5 million subscribers globally.

Regarding the ad-supported tier, the company revealed that 80 percent of viewings take place on a TV screen, and that 25 percent of new Netflix subscribers choose the new tier in countries where it is available, with an average age of 34. Advertising-supported subscriptions are mostly chosen by new customers, existing subscribers much less often change from more expensive packages in the hope of saving a few dollars a month.

The option may have become even more attractive recently after Netflix expanded the $6.99 package to include 1080p video quality, and also enabled streaming on two devices at the same time, while at launch only 720p quality was available, and users could only watch content on one device. .

Seeing the growth in popularity of the advertising-supported subscription model, the management of Netflix can breathe a sigh of relief, after the signs indicate that it has succeeded or is succeeding in achieving the commitments made to advertisers, i.e. the specific viewership numbers and advertising viewings, which form the basis of accounting for advertising contracts. For years, the managers of the service strongly opposed the introduction of advertising, but the stagnant growth and even the net loss of subscribers recorded last year forced them to look for new ways. The introduction of the more affordable package aims to appeal to newer subscribers, focusing on the price-sensitive segment.

Some research according to the major rivals, the new customers of HBO Max and Disney+ are even more receptive to advertising (the former launched advertising-supported subscriptions in the summer of 2021, the latter in December 2022), 21% of new American customers for the former in the three-month period following the introduction of the new package, and for the latter, 36% chose this construction, while the same proportion for Netflix is ​​19%.