Despite lofty initial uptake promises, Netflix’s long-awaited ad-supported tier got off to a slow start at best. It seems the once-dominant streamer may yet see the envisioned profit boost roll in, however, as it’s finally showing some signs of growth and momentum. Brandon Blake, entertainment attorney with Blake & Wang P.A, takes a closer look.
1 Million Monthly Users
Despite mediocre growth at launch, stats as of last month suggest the cheapest ad-supported tier of Netflix has finally crossed the 1M users benchmark. At launch, the tier proved to be the least popular of Netflix’s offerings, pulling in only 9% of their new signups (and accounting for a rather grisly 0.2% of overall US users). Of those signups, 43% were users downgrading existing tiers to the cheaper plan, with 57% accounting for brand new users.
Luckily for Netflix, which has a rather uncomfortable 2022 overall, this did pick up steam across December and January, managing to net 15% and 19% of new signups respectively.
The Disney Benchmarks
It’s hard not to compare that uptake to that of the Disney+ ad-supported tier, however. Launching a month later than the Netflix option, it managed to take 20%, 27%, and then 36% of new signups in its first three months. The two streaming juggernauts should have had roughly comparable brand appeal, although some other unpopular Netflix decisions in the months before the launch may have impacted them more than expected- such as the removal of account sharing, a feature they once actively used as incentive to new customers.
While the addition of an ad-supported tier to the Netflix platform hasn’t proved quite as popular as anticipated, it’s still a big leap forward from that very cold start. It does seem unlikely it will ever manage the kind of ad-supported saturation entities like Hulu have, where 57% of their customer base opt for the AVOD tier, but at least it is finally delivering on its initial promises to advertisers. While the first 2 months saw ad campaigns on the platform barely reach 50% of promised viewers, it has also reportedly reached initial projection targets for campaigns with the added onboarding. At this point, we imagine Netflix is happy to take what it can get.
Film and Television 