As Netflix’s ad tier hits 1M subs, the streamer bets on games and blockbusters to lure fresh eyes

Wednesday, March 22, 2023 by Snacks
11 minutes of ads (Matt Winkelmeyer/Getty Images)

11 minutes of ads (Matt Winkelmeyer/Getty Images)

12 hours of “Outer Banks”… two hours of ads. Netflix's ad tier is growing as more Americans pivot to cheaper streaming options. Bloomberg reported that the $7/month subscription hit 1M US users two months after launching in November. While the #s are a drop in the popcorn bucket compared to Netflix's 230M+ non-ad subs, they apparently topped advertisers’ expectations.

  • Adoption: In January 19% of new Netflix subscribers chose its ad tier. The ad-adoption is slower than that of its rivals: 36% of new Disney+ subscribers opted for ads after three months (and 21% for HBO Max).

  • #Subscripturation: The number of Americans who say streaming subscriptions are getting too pricey is up 50% since 2020, and nearly half of people in a recent survey said they pay for streaming services they don’t use.

Brick-breaking & blockbusters… Americans are bracing for Netflix’s password-mooching crackdown (expected this month). Meanwhile, Netflix needs to give 100M+ non-paying households a reason to pay for their own accounts. Yesterday the streaming leader said it planned to release 40 new in-app games this year, with 70 more in the works. It now has 55 games, including a "Too Hot to Handle" spin-off that’s racked up 1M+ downloads. Netflix also reportedly plans to splurge $200M+ on an original sci-fi flick (“The Electric State”). The Chris Pratt and Millie Bobby Brown movie could spawn more games, shows, and merch.


The biggest test is still ahead… So far, Netflix has rolled out its password crackdown only in a handful of countries, including Spain and Canada — but complaints are already flooding in. Still, the end of mooching could mean more ad-tier subs. Netflix hopes that if users are price-sensitive enough to “share” accounts with an ex, they might be willing to shell out $7 for ad-Flix. Especially if there are more reasons to tune in.

Subscribe to Snacks