In a recent announcement, Netflix executives stated that its ad-supported tier, introduced just a few months ago, now serves almost 5 million active users monthly. The new tier, available for $7 a month in 12 markets including the U.S., was brought in to complement its ad-free subscriptions starting at $10 per month.
This strategic move was designed to attract a larger customer base and introduce a fresh revenue source amidst the growing rivalry in the online viewer market.
During an annual event known as the upfronts, where networks seek to secure ad commitments for forthcoming shows, Netflix gave its inaugural presentation to potential advertisers. The streaming giant is competing with other major companies like Walt Disney Co and Comcast Corp for a share of the digital advertising pie.
Highlighting the expansive variety of its content, Netflix executives drew attention to popular series like “Stranger Things” and “Squid Game,” along with anticipated action sequel “Extraction 2.” Bela Bajaria, Netflix’s chief content officer, stated, “No other entertainment company strives to produce outstanding content in a multitude of genres, for a vast and diverse global audience.”
Jeremi Gorman, Netflix’s president of worldwide advertising, noted that the count of 5 million active users includes all adult profiles under one account that are served ads, whereas children’s profiles remain ad-free.
As of the end of March, Netflix boasted 232.5 million paying subscribers globally. The company’s executives expressed a desire to innovate with advertisers to devise new kinds of advertising unique to digital services. For example, Netflix’s co-CEO, Ted Sarandos, proposed the idea of a 30-minute commercial that unfolds gradually over several days in sync with the viewer’s Netflix consumption. He added that such a strategy would not be feasible on traditional TV, where viewers don’t stick to a single channel.