Netflix’s Ad-Supported Plan Struggles
Netflix’s ad-supported plan was introduced at a time that wasn’t ideal. The plan’s launch coincided with the ban on account sharing, causing a stir on social media and leading to the loss of over 2.5 million customers in Spain alone. The plan’s features are also limited, with part of the Netflix catalog being unavailable and playback limited to 720p resolution.
However, after a short time, Netflix reconsidered and announced that their ad-supported plan would feature 1080p resolution. Unfortunately, this hasn’t led to much success for the platform. According to an article by the Hollywood Reporter, only five million users have opted for the ad-supported plan out of Netflix’s 232.5 million users.
Engagement Low for Ad-Supported Plan
Netflix’s ad-supported plan isn’t attracting audiences, with the current rate of adoption not exceeding 2%. The company’s president of global advertising, Jeremi Gorman, revealed during a virtual presentation that the service’s new level of advertising has almost five million monthly active users worldwide, with an average age of 34 years, six months after launch. This is less than ideal and is not working out as expected.
Netflix co-CEO Greg Peters, on the other hand, said that a quarter of Netflix subscriptions in countries with the plan bet on the ad-supported rate. He painted a positive picture, saying that engagement on the ad-supported plan is similar to the comparable ad-free plans.
New Sponsorship Opportunities for Brands
Despite the low success rate, Netflix is still optimistic. The company is allowing for new sponsorship opportunities, such as the ability to sponsor series introductions at launch. Advertisers will now have guaranteed advertising placement for the most viewed series and will be able to use Nielsen Digital Ad Ratings to measure the reach of their campaigns. The platform also announced an agreement with data firm EDO to measure engagement.
It remains to be seen if Netflix will continue to improve its ad-supported plan. While it’s encouraging that one in four users is trying the rate with advertising, it’s clear that there are aspects that need improvement.