Not long after Netflix launched its ad-supported tier last fall, reports suggested that the new plan was off to a much slower start than the streamer had anticipated. Since then, Netflix’s Basic with ads has apparently picked up steam, as Bloomberg reported after seeing internal data. After two months, more than one million users had signed up for Netflix Basic with ads.
Netflix’s ad tier is picking up steam
According to the data seen by Bloomberg, the number of users on Netflix’s ad tier grew by 500% after one month and another 50% after two months. Bloomberg warns that the one million active users include multiple people on the same account and that the data is at least a month old, but it’s clear that reports of the new plan’s failure were greatly exaggerated.
“This doesn’t mean the advertising tier has had a meaningful impact on Netflix’s growth, at least not yet,” says Bloomberg’s Lucas Shaw. “Advertising-supported offerings from Hulu and Peacock have a lot more users, as do free services like Tubi and Pluto. […] But new advertising-supported services from Netflix and Disney are working as intended.”
Bloomberg also cites a recent report from analytics firm Antenna which shows that 19% of Netflix users signed up for the Basic with ads plan this January — up from 15% in December and 9% in November. In fact, more subscribers signed up for Basic with ads than the ad-free Basic plan in January, which suggests that $6.99 a month is a compelling price point.
Not only is Netflix’s ad-supported tier performing reasonably well, but it still has plenty of room to grow. The streamer is about to face another big test as it implements new password-sharing restrictions in the US, at which point friends and family members who share accounts will have to decide whether to pay for their own accounts or ditch the service.
