Netflix announced that its cheaper, ad-supported tier has seen a significant increase in global monthly active users, reaching 40 million. This growth is nearly double the figure shared by the streaming giant earlier in the year. Along with this milestone, the company revealed its plans to launch its own advertising platform and move away from its partnership with Microsoft for this technology.
Netflix’s decision to launch its own advertising platform signifies a strategic move aimed at increasing revenue and further expanding its reach. The company will test its ad tech platform in Canada later this year before rolling it out in the U.S. by the end of the second quarter next year. Netflix’s goal is to have the platform live globally by the end of 2025.
In addition to ending its partnership with Microsoft, Netflix will collaborate with other ad tech companies such as The Trade Desk, Google Display & Video 360, and Magnite. This diversification of partners aims to enhance Netflix’s capabilities in the advertising space and offer more tailored solutions to its advertisers.
A significant development for Netflix is its foray into live sports, with a deal to stream two National Football League games on Christmas Day this year, followed by similar matchups in 2025 and 2026. The company will pay an estimated $75 million per game for this opportunity, marking a new direction for Netflix in the realm of live events.
Netflix introduced its ad-supported subscription plan in 2022 as part of a broader effort to drive revenue and counter slowing subscriber growth. The removal of the cheapest commercial-free plan in certain regions has resulted in 40% of new signups opting for the ad-supported option. This shift has contributed to Netflix’s total subscriber count of 270 million.
Netflix’s growth comes at a time when traditional media companies are seeking to make their streaming platforms profitable amid a shifting landscape. Competitors like Disney+ and Warner Bros. Discovery are also expanding their subscriber bases and exploring partnership strategies. The rise of fledgling competitors such as Peacock and Paramount+ underscores the evolving dynamics of the streaming market.
Netflix’s position as a leader in the streaming industry has been solidified, with Disney executives hailing it as the “gold standard” of streaming. As linear TV audiences continue to decline and digital advertising shows signs of growth, Netflix’s expansion into advertising and live sports reflects a strategic response to market trends. With a focus on innovation, partnerships, and subscriber growth, Netflix is poised to maintain its competitive edge in the evolving streaming landscape.