For years, Netflix was not an advertising-supported platform. Its platform was commercial free and remained strong even amid new competition. Fast forward to November 2022, Netflix has started an ad-supported option and, since, has amassed one million monthly active ad-supported users.
Analysts are concluding that Netflix will continue to see gains. However, the gains will be just a lot more modest than before. A good percentage of Netflix's new business will choose the ad-supported option. The ad tier now accounts for about 20% of new sign-ups in the US, according to Antenna.
The ad-supported option is just an alternative for the price-conscious media consumer, not the preferred service.
CRACKDOWN ON sharing
Now, with the crackdown on Netflix password sharing might change the dynamics somewhat. The inability to share passwords will force millions of people to stop using their friends’ accounts, at which point they can either quit Netflix or pay. If you are price-sensitive, the $7 version of Netflix is a lot more appealing than the $15 or $20 version.
Netflix was able to resist the allure of ads for so long because it stood alone in the world of streaming services. When every other media company started coming out with their own streaming platform, that became more of a challenge for Netflix. Companies like Disney+ were offering subscriptions as low as $5 a month! With so much to choose from, consumers started subscribing to multiple platforms. Subscribing to multiple streaming platforms can add up in a hurry. Therefore, to keep other platforms, Netflix users might opt for the ad-supported option to save some money.
Carolina Macedo, the author, is Project Coordinator of Marketing Keys.