Netflix has amassed 23 million monthly active users on its ad-supported tier, the company’s advertising chief announced at CES 2024.
Speaking at the Variety Entertainment Summit in Las Vegas, Amy Reinhard revealed that 85 percent of ad-supported members watch Netflix for more than two hours per day. “The thing we’re really excited about is the engagement,” she said.
The announcement comes just two months after Netflix reached 15 million ad-supported users globally in November 2023. Reinhard took over as President of Advertising in October when Jeremi Gorman left the role after 13 months with the company.
Paying off
This time last year, the streaming giant raised eyebrows by saying it aimed for an ads business as large as Hulu. And while short of the estimated 45 million ad-supported subscribers on Hulu, which has run ads since 2010, Netflix’s efforts to drive sign-ups to its ad tier appears to be paying off.
In May, Netflix introduced its infamous crackdown on password sharing, encouraging users to sign up to the ad tier. The streaming service then removed its basic ad-free plan as an option for new subscribers, and raised the price of its premium ad-free offering. The company said around one-third of new sign-ups were choosing the ad-supported plan.
“We’re very fortunate to be able to take a long-term perspective on this,” Reinhard said at CES. “Scaling our business is absolutely our biggest priority right now, but we want to make sure we’re doing that in a meaningful way for the members.”
Striking back
Netflix’s journey into advertising has not been entirely smooth sailing. Netflix partnered with Microsoft to build the ad tier in 2022, and reports suggest executives have been frustrated by Microsoft’s ad sales. Reinhard told the Variety summit that the relationship was going well, but seemingly did not comment on the future of the partnership, which is due to expire this year.
The company was also hit by the Hollywood strikes in 2023, and pulled back on content for the first time. According to Bloomberg, Netflix released around 130 fewer titles in 2023 than the previous year. But the streaming service is reportedly supplementing its content slate with titles from Warner Bros. Discovery, with Young Sheldon climbing the Nielsen rankings since landing on Netflix in December.
Netflix currently dominates the US Nielsen ratings, scoring eight of the top ten streaming titles for the first week of December. Combined with Reinhard’s claim that ad-supported members watch Netflix for more than two hours per day, the company is making a major play for advertisers.
