Netflix’s advertising plan turned out to be successful for the platform

When Netflix started rolling out its plan with advertising in the first countries in November 2022 it was unknown whether this strategy would be successful. The streaming giant entered a world it had previously publicly rejected. “When you read rumors about a possible move to advertising, know that it is not true,” the company said a year ago, saying moving away from advertising was part of its core.

Two years later, all signs point to Netflix making the right bet. The US company’s ad-supported plan already has 70 million monthly active users worldwide. This figure has materialized after steady growth throughout this time, but there’s more to come: More than 50% of new Netflix subscribers now sign up for the service through an ad-supported plan in countries where the option is available. .

Netflix’s commitment to advertising is paying off

As we can see, Netflix’s advertising strategy has become a key part of its business. The ad-supported plan had 22 million monthly active users in January of this year. However, this figure has increased to 40 million users in May last year. “We continue to see steady progress in participation numbers in all countries,” Amy Reinhardt, Netflix’s president of advertising, said in a statement released Tuesday.

The streaming giant’s move to advertising has allowed it to offer more cost-effective subscriptions. The standard ad-supported plan has 1080p quality, downloads on two devices, and plays on two devices simultaneously for €6.99 in Spain and $6.99 in the US (it’s also available in many other regions). Advertisers, for their part, have access to a measurement system that allows them to know the effectiveness of their advertising campaigns.

Netflix has opened up the possibility of launching an ad-supported plan in April 2022 after losing subscribers for the first time in a decade. The panorama at that time was very different from today. Hulu and HBO Max They opted for advertising, and Disney+ was preparing to take the first steps in this direction. Ad-supported plans are now a reality for most streaming services you can sign with.

The company, led by Ted Sarandos and Greg Peters, has left its doldrums behind. The number of subscribers has continued to grow in recent years, even as their subscription prices have also risen. Subscribers increased by 5.1 million in the most recent quarter, reaching an impressive global tally of 282.72 million subscribers. The company also beat analysts’ forecasts and recorded net income of $2.364 million.

Images | Netflix

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