Bloomberg reports on developments for Netflix‘s ad-supported efforts.
- Netflix ad-supported service reached 1 million US monthly active users in two months
- User base grew 500% in first month, 50% in second month
- Netflix fulfilled forecasted ad deliveries despite initial scrutiny
- Advertising tier not yet significantly impacting Netflix’s growth compared to competitors
- Ad-supported tier attracts new customers, offering cheaper alternative
- About 20% of new US sign-ups are for ad-supported tier
- Ad tier’s effectiveness to be tested as Netflix cracks down on password sharing
Why it matters: the outcome of this business model ‘experiment’ is crucial for the streaming industry