Netflix announced on Wednesday that its ad-supported tier has achieved 40 million global monthly active users, a significant increase from 5 million a year earlier. 

This growth indicates that Netflix’s strategy to attract new users through a cheaper, ad-supported plan is yielding positive results.

The rise in users comes amid intense competition in the streaming industry, with companies introducing various bundles to retain subscribers. 

Netflix’s ad-supported plan, launched in November 2022, has proven popular, with 40% of all new sign-ups in countries where the plan is available coming from this tier.

Recent data from research firm Antenna showed that, in the fourth quarter, ad-supported plans accounted for the majority of gross subscriber additions in the streaming industry for the first time. This trend highlights a growing consumer preference for more affordable streaming options that incorporate advertisements.

To further enhance its advertising capabilities, Netflix announced plans to launch an in-house advertising technology platform by the end of 2025. This platform aims to provide advertisers new ways to purchase ads and engage with users. 

To support this initiative, Netflix will collaborate with Trade Desk, Google Display & Video 360, and ad-tech firm Magnite, alongside Microsoft, to accelerate the development of automated ad buying.

Netflix’s ad-supported plan is $6.99 per month, which positions it competitively against similar offerings from rivals. 

Warner Bros Discovery’s streaming service Max offers a monthly plan at $9.99, while Walt Disney’s Disney+ has an ad-supported tier at $7.99 per month. 

Additionally, Comcast-owned Peacock recently announced it would raise the price of its ad-supported plan to $7.99 per month.

Netflix also revealed plans to stream two National Football League (NFL) games on Christmas Day this year to diversify its content and attract more viewers.