Netflix's Ad-Supported Tier Now Dominates New Subscriptions

Netflix has shifted away from its original, subscription-only model, expanding into split-season releases, live content, sports and wider theatrical distribution for originals. It began experimenting with an ad-supported tier in November 2022, and as of last month over 60% of new subscribers are choosing that cheaper option — a sign the streaming market is starting to resemble traditional cable.

Other platforms have followed suit: Prime Video, HBO Max and Paramount+ offer ad tiers, while Disney+ and Hulu have long had ad-supported plans that have grown in popularity. With 90% of households using at least one streaming service and an average of four subscriptions per household, Netflix is no longer the sole service for many viewers, who often prefer lower-cost options so they can subscribe to multiple services.

Advertising has become central to Netflix’s strategy because there’s a limit to growth through subscription fees alone.

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