Rosalind Evans
The introduction of Netflix’s ad-supported subscription tier has proven to be a significant boon for the streaming giant, with a rapid growth in global monthly active users, which now stands at an impressive 15 million. This marks a notable milestone as the figure has tripled from the count disclosed in May, indicating strong growth and user acceptance of the new subscription option. The company’s shares saw a positive uptick of approximately 2% on Wednesday following this announcement.
Netflix rolled out its ad-supported plan alongside a crackdown on password sharing, strategically aiming to boost revenue amidst a slowdown in subscriber growth. This move has certainly paid off, with Netflix’s third-quarter report revealing an addition of 8.8 million subscribers, surpassing Wall Street’s expectations. Moreover, the company anticipates a similar surge in subscriber growth in the fourth quarter.
In her blog post on Wednesday, Netflix’s newly appointed President of Advertising, Amy Reinhard, detailed some enticing updates for advertisers and users. Advertisers now have a range of options with the ability to choose from 10-, 20-, and 60-second ads, in addition to the previously offered 15- and 30-second spots. Reinhard expressed that this diversification will provide advertisers “around the world multiple formats to leverage.” As for the ad tier subscribers, they can look forward to an upgrade in streaming resolution to 1080p from the existing 720p, along with the ability to download movies and series to their devices starting at the end of this week. In a strategic move to captivate binge-watchers, Netflix will introduce an ad-free episode following three consecutive series episodes beginning in the first quarter 2024.
Netflix’s strategic implementation of its ad-supported subscription tier, combined with enhanced features and benefits for advertisers and users, has been a fruitful endeavour, bolstering its global subscriber count and potentially paving the way for further growth and innovation in the streaming industry.
