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Netflix The company announced Wednesday that its cheaper ad-supported tier has gained 40 million monthly active users worldwide.
That’s nearly double the 23 million figure the streaming giant shared in January.
The company also said it would launch its own advertising platform and not partner with Microsoft on its technology. The tech giant will remain a programmatic advertising partner, but will also be joined by other ad tech companies such as The Trade Desk, Google Display & Video 360, and Magnite.
Netflix will begin testing its ad tech platform in Canada later this year, and plans to launch it in the U.S. by the end of the second quarter of next year. The company aims to have the platform live everywhere by the end of 2025.
The announcement was made Wednesday in tandem with Netflix’s upfront presentation aimed at attracting advertisers. The streaming giant has joined its media peers for the second time in its annual pitch to lock advertising onto its platform.
The company announced earlier Wednesday that it had reached an agreement to stream two National Football League games on Christmas Day this year and at least one game on the same day in both 2025 and 2026. .
Netflix has the option to host one or two games in the future, with 2024 serving as a test, co-CEO Ted Sarandos told CNBC on Wednesday.
This will be Netflix’s first serious foray into live sports after years of resistance. Sports, especially the NFL, has proven to be the glue that keeps traditional television intact and has also proven to be a boost for streaming services.
Terms of the NFL deal were not disclosed, but people familiar with the matter said Netflix plans to pay him $75 million per game. Spokespeople for the NFL and Netflix declined to comment.
Streamers hire their own announcers for their games and partner with existing production companies. Sarandos told CNBC that he felt the NFL was the best fit because it fits the streamer’s event strategy and allows Netflix to effectively own the day.
streaming advertising market
Netflix first introduced ad-supported subscription plans in November 2022 as part of a broader effort to drive revenue as subscriber growth slows. That strategy included a crackdown on password sharing last year.
Since then, Netflix has been working at breakneck speed to grow its ad-supported customer base, even though it was admittedly slow to join others. As part of that effort, Netflix has discontinued its cheapest commercial-free plan in the US and UK.
The company announced Wednesday that 40% of all registrations in countries where ad inventory is available are taking advantage of its cheaper plans. Netflix currently has 270 million total subscribers.
For comparison, Disney’s flagship service, Disney+, has 117.6 million global subscribers, while Max’s Warner Bros. Discovery’s streaming division has 99.6 million subscribers. The two companies recently announced that they will be offering streaming bundles to prevent subscriber churn and help monetize their streaming businesses.
Meanwhile, upstart competitors are adding subscribers every quarter, but still aren’t keeping up. Comcast’s Peacock had 34 million customers as of the most recent quarter, and Paramount Global’s Paramount+ had 71 million customers.
Netflix’s monthly active ad tier user numbers were released just one month after the company told investors it would no longer update quarterly subscriber numbers. The company said at the time that it was generating significant profits and free cash flow, and that member numbers were not the only factor driving the company’s growth. The company said this metric became less important after it began offering multiple price points for members.
Meanwhile, terrestrial television viewership continues to decline, and traditional media companies are trying to gain a foothold in the streaming realm.
Traditional media companies have struggled in recent quarters as the advertising market collapsed amid fears of a recession and rising interest rates. During times of economic uncertainty, companies typically cut back on advertising spending.
But the streaming business has a long way to go, and while many other companies struggle to make their streaming platforms profitable, Netflix has established itself as a leader in the space.
Disney executives recently called Netflix the “gold standard” for streaming and also noted that recent competitors have created additional supply in the advertising market, likely referring to Netflix. Seem.
Media companies recently released quarterly results showing that the traditional TV ad market, while improving, remains weak. However, digital and streaming advertising is on the rebound.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
