Netflix’s ads tier continues to defy critics as sign ups jump 8 million in 2 months

Netflix’s ad-based plan continues to grow – and viewers are spending more time streaming, too

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Ad-supported streaming is the key battleground between the big TV and movie streamers, and Netflix appears to be winning the fight.

According to the streaming giant’s advertising president Amy Reinhard (perVariety), Netflix’s Basic with Ads tier had attracted eight million more subscribers by late 2023. That means the world’sbest streaming service’s ads-supported subscription figure has rocketed to a whopping 23 million users, which accounts for almost 10% of its entire fanbase.

Speaking at Variety’s entertainment summit at CES 2024, Reinhard also suggested that 85% of viewers who are signed up toNetflix’s ad-based plan were streaming more than two hours daily. Those numbers are likely to increase further, too, with T-Mobile’s Netflix on US program now gifting a free Netflix with Ads account to any new customers (NB: T-Mobile’s Netflix deal had previously bundled the streamer’s non-ad-supported subscription with its mobile contract plans).

Netflix has been aggressively pushing its Basic With Ads service ever since it madeits ad-supported tier announcement in June 2022. Just five months later,Netflix’s ad-based subscription option was made availablein numerous territories, and it’s gone from strength to strength since. Indeed, withNetflix’s ad-supported tier getting new perks, such as the ability to download TV shows and movies onto your device of choice, it’s evenphased out its cheapest ad-free plan in the US.

Why 2024 will be the year of ad-supported streaming

Netflix isn’t the only big streamer with an ad-supported tier, with rivalsDisney Plus,Hulu, andMaxall introducing ad-based plans since Netflix initially led the charge.

But 2024 is expected to be the year when streaming giants really start to battle for the most ad-supported customers and, from an income perspective, the most cash from advertisers. As we reported in September 2023,Amazon is also set to introduce ads to its Prime Video streaming platform, with the e-commerce giantbringing ads to Prime Video in late January. Well, in the US – the UK will follow suit on February 5, with Australia getting them sometime this year.

The arrival of ads onPrime Videois a big deal forAmazon, too, with the megacorporation predicting 115 million people will see advertisements when they stream thebest Prime Video moviesandbest Prime Video showsaround. The introduction of ads on Prime Video has already drawn criticism from some, though, especially in light ofAmazon reportedly laying off hundreds of employeesahead of its ads-based event.

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That won’t matter to Amazon, though. Speaking toDigiday, third-party analysts say  the market is changing as more premium streaming becomes ad-supported: Hulu andPeacockare currently considered the best places for advertisers, with Disney Plus and Max coming in slightly behind. Netflix and Paramount Plus are also bubbling away nicely.

One of the big questions hanging over 2024, however, is about advertisers' budgets. According to Digiday, “every agency executive interviewed for this article cited an extreme level of budget volatility at the moment that could affect how much money is spent on streaming.” That could make streaming ads less lucrative – they currently command a premium over much traditional TV – but could also mean serious money goes to the streaming giant who can deliver the best targeting and viewer data.

One thing that is clear is that ad-funded streaming isn’t going away. It’s moved from the periphery of the business to its very centre, and that means the future of online TV is ironically starting to look a lot like its cabled past.

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Writer, broadcaster, musician and kitchen gadget obsessive Carrie Marshall has been writing about tech since 1998, contributing sage advice and odd opinions to all kinds of magazines and websites as well as writing more than a dozen books. Her memoir,Carrie Kills A Man, is on sale now and her next book, about pop music, is out in 2025. She is the singer in Glaswegian rock bandUnquiet Mind.

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