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Netflix's Ad-Supported Users Reach 70 Million, Nearly Doubling Since May, Boosting Future Growth

Wallstreet InsightTuesday, Nov 12, 2024 9:13 am ET

1min read

Netflix's ad-supported subscription tier has reached 70 million global monthly active users, just two years after its launch in November 2022.

The company announced on Tuesday that more than 50% of its new sign-ups in countries offering the ad-supported option are choosing this cheaper plan. This marks significant growth from the 40 million active users reported in May this year.

The introduction of the ad-supported tier was in response to a slowdown in subscriber growth, but recent trends show that subscriber growth is no longer an issue. In the third quarter, Netflix added 5.1 million subscribers, bringing the total to approximately 283 million memberships across all pricing tiers. This surge in subscribers has exceeded Wall Street estimates.

Netflix's strategy to diversify its content and revenue streams has included increasing its streams of live events, such as two National Football League (NFL) games scheduled for Christmas Day this year. The company has already sold out its ad inventory for these games, with sponsors like FanDuel and Verizon. FanDuel will be the exclusive pregame sportsbook betting partner and will feature a sponsored in-show segment.

In addition to live sports, Netflix has been promoting games on its platform and cracking down on password sharing to boost revenue. The ad-supported tier, priced at $6.99 per month in the U.S., offers a more affordable option compared to ad-free plans that start at $15.49 per month. Initially powered by Microsoft's technology, Netflix is transitioning to its own in-house ad technology to function independently from third parties.

The company has seen continuous momentum and growth across all areas of the business. Amy Reinhard, president of advertising at Netflix, expressed optimism about the future, stating, "There has been continuous momentum over the last two years, but we're just getting started and can't wait to see what's to come."

Netflix's broader push to diversify its offerings and increase revenue includes plans to launch its own advertising platform by the end of the second quarter next year in the U.S., with a global rollout expected by the end of 2025. While advertising is not anticipated to become a primary growth driver until 2026, the current growth in the ad-supported plan demonstrates the potential for significant future revenue.

Beginning next year, Netflix will shift its focus from subscriber numbers to revenue and other financial metrics as performance indicators, reflecting its evolving business strategy.

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Euro347

11/12

I'll admit, investing isn't my strong suit. My partner, on the other hand, thinks he's found a guaranteed way to boost our retirement income. So, I was wondering, is this plan legit or a big fat scam? Partner wants to sell our house for around $400k and invest it all in Verizon stock because they're offering a 6+% annual dividend. He thinks this will be enough to supplement our Social Security income and allow him to retire at 65 (he's currently 64). But he has no other investments. To me, this sounds crazy risky and unrealistic. I mean, isn't it better to diversify and not put all our money into one stock? He doesn't want to use a broker or financial advisor either. I'm wondering if he's insane or if I am for thinking this is a bad idea. Am I missing something here?

Repturtle

$NFLX This stock soared from 460 in January to 816 by year-end, seemingly without justification……Earnings on Jan 23 are likely to undermine some of those gains.

MickeyKae

$NFLX This stock drives me nuts every day! It's the biggest fraud on the market!

daynightcase

$NFLX, after the bubble burst, easily saw its stock prices decline.

Sugamaballz69

70 million? That's a whole lotta ads. Hope they're not sacrificing content quality for the sake of numbers...

BrianNice23

$NFLX this is a buy, hold, and win strategy. Simple enough!

Far_Sentence_5036

$NFLX

that_is_curious

$NFLX - Netflix: Ad-supported streaming service hits 70M monthly active users globally

Bothurin

Password sharing crackdown? Live events? Ads? I've been with Netflix since '08, and this is the most changed I've seen it. Is it still the 'Netflix' I love?

aiolyfe

Interesting to see how Netflix is diversifying its revenue streams. Will be keeping an eye on their ad platform launch in Q2 next year. Could be a game-changer

Gentleman1217

Interesting to see how Netflix is shifting focus from subscriber numbers to revenue metrics. Will be keeping an eye on their Q1 2024 reports to see how this strategy pans out.

nrthrnbr

Just hit 70 million? That's cute. Wait until they realize they're the ones being advertised to all along...

Ogulcan0815

The fact that they're already selling out ad inventory for their live events is HUGE. The real money will start rolling in once they launch their own ad platform. Buying Netflix stocks tomorrow!

Regime_Change

Loving the momentum! $6.99 for Netflix ads is a steal! Keep pushing the boundaries, Netflix! My subscription is staying put

DoU92

I've had the ad-supported plan since launch, and it's been a mixed bag. Some ads are tolerable, but others feel like they're intentionally trying to annoy us. Not sure I'm renewing next year...