Netflix proves its critics wrong about their prediction regarding their business move as its Basic with Ads tier continues to thrive.
Surprisingly, the new subscription sees an astounding surge of eight million subscribers by late 2023.
As shared by Netflix's advertising president, Amy Reinhard, at Variety's entertainment summit at CES 2024, the streaming giant remains a dominant force in the industry.
The Basic with Ads tier now commands a staggering 23 million subscribers, constituting nearly 10% of Netflix's extensive fanbase.
Netflix's Ad-Tier is Thriving
Despite the criticism thrown to Netflix about its ad-tier subscription plan, the streaming giant proves that critics are wrong. According to the latest report, the number of ad-based plan subscribers continues to grow.
Consuming online content is one of the most common ways to pass the time. For global users, the daily average of screen time surged to 6% in 2023.
While screen time for Americans decreased to 4.34 hours from their 2022 record of 4.42 hours, this does not mean that many of them still find time to watch their favorite Netflix shows.
According to TechRadar, Reinhard shed light on the engagement levels within Netflix's ad-based plan. He reveals that 85% of subscribers to this tier stream for over two hours daily. This indicates a robust and committed user base.
Netflix's strategic push for ad-supported streaming intensified with the incorporation of new perks for its ad-supported tier, including downloading content for offline viewing. The move even led to the phasing out of the cheapest ad-free plan in the US.
Related Article: Netflix Reaches 5 Million Monthly Active Users for its Ad-Supported Subscription
The Year of Ad-Supported Streaming Showdown
There's no question that Netflix is undoubtedly a strong force in the streaming industry. As it shuts down critics who opposed the ad-supported tier, this does not mean that the battle is already over for the entertainment giant.
2024 is poised to be a tough battle for Netflix as it vies for the streaming service among its competitors.
Competitors such as Disney Plus, Hulu, and Max have also entered the ad-supported tier arena, following Netflix's pioneering lead.
Amazon, a significant player in the streaming market, is set to introduce ads to its Prime Video platform in late January. This marks a turning moment for the Seattle firm in the streaming industry.
What Does it Imply About Advertisers' Budget
As the industry changes towards more premium ad-supported streaming, questions loom over advertisers' budgets.
Industry experts highlight an unprecedented level of budget volatility, potentially impacting streaming ad expenditures. While streaming ads currently command a premium compared to traditional TV, the landscape's evolution could lead to a redistribution of ad budgets.
Streaming services that excel in targeting and viewer data analytics stand to attract significant advertising investments.
Irreversible Rise of Ad-Funded Streaming
The trajectory of ad-funded streaming is unmistakably clear - it has transitioned from the periphery of the business to its core.
Two days after Netflix announced its booming ad-tier subscribers, the streaming company just won a shareholder lawsuit.
According to WION, it emerged as the victor in a lawsuit about the disclosure of account-sharing.
Earlier, Netflix was accused of concealing the negative effect of the said method on its growth. In short, the plaintiff believed that Netflix was not transparent about its record all along.
It's interesting to know how far Netflix has gone. In the 2022 survey, it was indicated that Netflix was losing subscribers because of its expensive subscription plans.
Read Also: Overcharged Netflix Bill? Virgin Media Warns Customers to Check for Incorrect Subscription Charges
