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Initially, Netflix was opposed to the idea of displaying ads to reduce the price of its subscription and attract more subscribers. But the group finally changed its mind. And two years ago, it displayed its first ads on a new, cheaper subscription that was partially financed by advertisers. Today, the company has no regrets, since advertising is now one of the pillars of its business model.
In an announcement posted on its website, Netflix states that the ad-supported subscription now has over 70 million monthly active users. And this offer is particularly popular among new subscribers. In fact, in countries where the ad-supported offer is available, it has a share of over 50% of new subscriptions. “As we celebrate two years since the launch of Netflix’s advertising business, we continue to see positive momentum and growth across all areas of the business,” reads the announcement, published by Amy Reinhard, president of advertising at Netflix.
The growth of Netflix’s ad-supported subscription is very impressive. Indeed, as The Hollywood Reporter points out, it only had 15 million users a year ago and 40 million users six months ago.
200% Deposit Bonus up to €3,000 180% First Deposit Bonus up to $20,000The offer also appeals to advertisers
Obviously, for this subscription to be profitable, it must also attract advertisers. And on this side, Netflix is also doing well. In December, the platform will broadcast two NFL (American Football League) games. And today, all the advertising inventory for these events is already sold. In addition, the platform has also signed special partnerships with brands, for the release of the new season of Squid Game.
The platform is also making huge strides in measuring the effectiveness of its ads for advertisers. And on the technology front, it is moving toward using its own ad tech, instead of relying on third-party services. Canada is the first country where Netflix ads rely solely on its own ad tech. And by 2025, that will be the case for all countries where the company offers its ad-supported subscription. According to the company, its new offering gives advertisers more flexibility.
Netflix on the brink of major change
Netflix discusses the success of its ad-supported subscription, as it prepares to radically change the way its performance is measured. Traditionally, investors judge Netflix’s performance by analyzing financial results and subscriber growth.
But next year, the SVOD will no longer systematically declare its number of subscribers. Why ? Netflix’s business model has evolved, and the number of subscribers is no longer a relevant indicator for evaluating its performance.
- Two years ago, Netflix launched its cheaper subscription, but with ads
- Today, this subscription has more than 70 million users
- In addition, the platform is attracting more and more advertisers
- And the latter is preparing to use its advertising technologies exclusively
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