Netflix’s ad-supported tier is surprisingly popular—especially to Netflix

The streaming service isn't out of the woods yet, but things are going better than Netflix thought they would

By Sam Barsanti  |  January 19, 2023 | 11:15pm
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Netflix’s ad-supported tier is surprisingly popular—especially to Netflix
Netflix Photo: Mario Tama

When Netflix finally announced the long-dreaded ad-supported tier of its streaming service, it seemed like the most obviously desperate move in a year of total desperation for the company. Subscriber numbers were down, shareholders were getting annoyed, and cracking down on people sharing their passwords somehow wasn’t earning the company any goodwill. The ad-supported option didn’t even seem like an especially great deal: For half the price of regular Netflix (which is absurdly expensive, by the way) and agreeing to put up with advertisements, you didn’t even get access to all of the stuff on Netflix—since some content had only been licensed to the streaming service on the understanding that it would never have ads.

And yet, much to Netflix’s surprise, people are going for it. As reported by The Hollywood Reporter, Netflix had previously indicated that it expected its ad-supported tier to get “around 4.5 million subscribers” in the fourth quarter of 2022 when it was introduced, but the company announced today that it actually got 7.6 million new subscribers on the tier with ads. That’s a higher number!

It doesn’t sound like Netflix got into why the numbers were higher than expected, but we would wager that it has something to do with the other Netflix plans being stupidly expensive and not that ads are more appealing than anyone previously thought. THR does note, though, that Netflix still plans to institute more lockdowns on password sharing and that different levels of ad-supported tiers will be introduced as time goes on, so it’s not just going to take this good news and be content.

In relevant Netflix news, the THR story also points out that the company intends to maintain its regular “$17 billion content spend budget,” but it’s going to be releasing about half as many movies this year as it made for last year (49 versus 86, which still sounds like so many). Also, co-founder Reed Hastings is stepping back from his role as co-CEO of the company, with current COO Greg Peters stepping up to be the new co-CEO alongside Ted Sarandos. This won’t make a huge difference in the lives of regular people, though, since Sarandos was already the one who generally makes creative decisions and communicates more often with the public—even when he absolutely should not.

 
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