- Netflix’s ad-supported plan now boasts 70 million users, a significant increase from 40 million in May.
- The streaming giant is expanding its advertising offerings, including partnerships with major brands like FanDuel, Verizon, and Kia.
What happened
Netflix’s journey into advertising has taken a remarkable turn. Once staunchly opposed to commercial interruptions in its content, the company now reports a booming success for its ad-supported streaming tier. With 70 million global users, Netflix’s ad-supported plan has far exceeded the expectations of the industry, positioning itself as a major player in the ad-driven streaming market.
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The numbers are impressive. Just six months ago, Netflix reported 40 million users in its ad-supported plan, up from 22 million in January. The streaming giant’s chief advertising officer, Amy Reinhard, noted that over 50% of new sign-ups in regions with ad options are choosing the ad-supported plan. This growth trend is sparking interest among marketers, eager to capitalize on Netflix’s expanding reach. However, despite the numbers, U.S. advertisers are looking for more impressions, signaling that Netflix’s ad-supported plan must continue to build on this momentum for wider appeal.
One of Netflix’s most significant moves was its foray into live sports broadcasting, with the upcoming Christmas Day NFL games. For the first time, Netflix will air major league sports, and advertisers such as FanDuel and Verizon are already jumping on board. FanDuel will offer a sponsored segment, featuring talent and betting predictions, while Verizon will sponsor the pre-game segment. These partnerships highlight Netflix’s ability to attract high-profile advertisers, capitalizing on its growing user base.
The company is also venturing into sponsorships tied to popular content. For example, Netflix has partnered with Kia for a series of ads around the next season of “Squid Game.” In Korea, the automaker will promote its new Sportage SUV with a series of ads tied to the show, and even host a live event in Seoul, spotlighting its collaboration.
Beyond content and sponsorships, Netflix is focusing on strengthening its advertising technology. The company has begun using its own ad-tech in Canada and is expanding its relationship with VideoAmp and Nielsen to track and measure viewership. This shift is crucial for improving cross-screen measurement and delivering better targeting capabilities to advertisers.
Why this is importnat
Netflix’s aggressive expansion into the ad sector shows no signs of slowing down. With plans to further enhance its in-house ad technology and measurement capabilities globally by 2025, Netflix is positioning itself to compete fiercely with traditional TV networks and other digital platforms.
With 70 million users now on the ad-supported plan, Netflix has proven the viability of this model, attracting both consumers looking for cheaper options and advertisers eager to tap into the platform’s massive global audience. The expansion of partnerships with major brands like FanDuel, Verizon, and Kia shows that Netflix is not only attracting users but is also becoming a powerful advertising platform in its own right.
The push into live sports broadcasts and high-profile sponsorships further strengthens Netflix’s advertising proposition. By securing commercial deals for NFL games and leveraging its popular shows like “Squid Game,” Netflix is positioning itself as a major player in the ad-supported streaming space, which could reshape the competitive landscape of digital entertainment.
Furthermore, the company’s investment in ad-tech and partnerships with companies like VideoAmp and Nielsen indicates that Netflix is serious about refining its ad offerings. The ability to measure and optimise ad performance will be critical for attracting even more advertisers, which will help Netflix continue to grow its ad-supported user base and increase its ad revenue streams. As Netflix’s ad-supported plan moves towards launching its own ad-tech globally by 2025, the company is laying the groundwork for a future where advertising plays a central role in its business model.
