Netflix plans to make advertising a major revenue source to complement subscriptions.
Netflix said 70 million viewers are watching its shows with advertising every month, nearly double the total from May.
More than 50 percent of new subscribers are opting for Netflix's ad-supported plan in the countries where it is available, Amy Reinhard, the company's president of advertising, said in a blog post published Tuesday. The company is seeing “steady progress” across all 12 countries where the advertising plan is available.
Netflix plans to make advertising a major revenue source to complement subscriptions, yet its ad business is still small relative to peers. For years, the company positioned itself as an alternative to ad-supported TV and only introduced commercials when it lost customers in 2022.
Netflix has priced its advertising-supported plan as a less-expensive alternative for cost-conscious users, a tactic that has produced steady growth. The company had 40 million monthly active users on ad plans in May. It finished the third quarter with a total of 282.7 million subscribers.
Some peers, such as Amazon.com Inc., have asked customers to pay more if they want to skip ads, thereby converting a majority of their video customers to plans with commercials.
Like its competitors, Netflix is investing in live programming, such as the National Football League and World Wrestling Entertainment, that will put ads in front of all of its customers, thereby creating additional inventory for marketers.
The company said it has sold out all of its in-game inventory for two live NFL games scheduled for Christmas Day. The betting site FanDuel and Verizon Communications Inc. are among the major sponsors, with their own features or segments. The day after Christmas Netflix will release a second season of Squid Game, the scripted South Korean survival drama. It will have multiple advertisers in the 12 countries where the company airs commercials, including Kia Corp. in South Korea.
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