Netflix Advertising Level Reaches 5 Million Global Users Six Months After Launch; The company tells the virtual audience when it first launched that a quarter of new subscribers opt for the advertising plan

Six months after the historic launch of its ad-supported subscription tier, Netflix said the plan had reached 5 million monthly active users worldwide.

The number, along with other statistics, information, and product and programming announcements, were revealed during the company’s initial pitch to advertisers. The LA-shot pre-recorded event was held virtually in part due to concerns over the WGA strike and talent uncertainties. Co-CEO Greg Peters began by acknowledging the remote setup was a change from a previously scheduled in-person gathering at the Paris Theater in New York, though he didn’t mention the labor dispute. “It’s not exactly how we originally planned,” he said, “but we live in a dynamic world and we’ve definitely found being able to adapt to a new reality is very helpful.”

The MAU figure differs from paid subscribers and can be calculated differently by different companies depending on how they define what it means to be “active”. Although the number of MAUs is a fraction of Netflix’s global base of 232.5 million subscribers, the company said the number of paying customers on the $7-a-month ad plan has more than doubled since inception. of 2023.

More than a quarter of our subscribers now choose the advertising plan in countries where it is available. At launch, it was in 12 countries: Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, United Kingdom and United States. Seventy percent of our ad-supported members are between the ages of 18 and 49. and the median age of ad-supported subscribers is 34.

“The signals are promising: engagement on our advertising plan is similar to our comparable non-advertising plans,” said co-CEO Greg Peters. “It’s essential because it all starts and ends with the consumers.” The executive added that there was “a lot of avenue ahead of us”, citing the statistic that Netflix accounts for 10% of overall TV usage, even in its most penetrated territories.

Co-CEO Ted Sarandos said the company’s scale makes the advertising effort viable. “Our shows and films generate audiences that generate far larger global audiences than our closest competitors,” he said. Sarandos also provided context for the company’s longstanding resistance to allowing ads. “For years we have tried to keep our business as simple as possible, so that we can grow as quickly as possible,” he said. “But we actually realized that we had left out a big segment.”

Earthquake-like innovations from House of Cards will help eventually win over Netflix, even if they take several years to come to fruition, Sarandos added. He recalled his days in the home entertainment business, noting the VHS release of Superior gun in 1986, which featured an integrated Diet Pepsi ad. “It had never been done before, and the ad kicked ass!” Sarandos raved. “It was like an extension of the movie, and people loved it.” Before long, similar brand campaigns were woven into versions such as jurassic park and branded content was on the way. “What was once considered the most high-end real estate in entertainment,” he said, has become a sandbox for creative advertising. “We’re going to bring the same level of creativity to ads on Netflix.”

Due to the wealth of data Netflix has, Sarandos theorized, a 30-minute ad could be created, airing over several days in short bursts as viewers start and stop watching. “You can’t do that on linear TV because people don’t live on one channel. Now, that won’t happen next week, maybe not even next year. And that’s just an idea. We look forward to exploring your other ideas and opportunities.

The initial event marked a milestone for Netflix about six months after it fired up a $7-a-month ad-supported subscription plan after years of insisting it would never accept advertising. After partnering with Microsoft in the hastily announced effort, the company quickly scaled an advertising team led by Snap Inc. and Amazon veteran Jeremi Gorman. Another veteran executive who joined the group is Peter Naylor, who led ad sales at Hulu, whose traction in streaming ads was cited by Netflix co-founder Reed Hastings as a source of concern. inspiration to get into the game.

Wall Street analysts have predicted that the introduction of advertising could bring billions in new revenue to Netflix as it goes through a period where it overtook subscribers in North America. Netflix remains the top streaming operation by a fairly wide margin, but it faces growing competition both domestically and globally. Disney introduced an ad-supported version of its flagship Disney+ service last December. Disney and Netflix’s most recent quarterly reports revealed little in terms of early gains in advertising, though executives said they remained optimistic about the opportunity.

Gorman told buyers during her part of the presentation that she felt she had gotten a ‘promotion’ from the Netflix superfan to global head of advertising when she joined the company last year. . Only six months passed from the initial announcement of the ad serving plan to the launch of the ad-supported tier, she said, and only six more months since launch. “It’s been a little busy here,” she said. “But we’ve been incredibly thoughtful about how we engage members with our ad experience.”

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