Netflix draws 5 million people to ad-tier in first 200 days
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Netflix has attracted nearly 5 million monthly active users to its new ad-tier service after launching fewer than 200 days ago.
Why it matters: The company revealed the metric for the first time during its first-ever upfronts presentation this week — marking two new milestones in its firm shift toward building a traditional ad-supported media business.
Context: Monthly active users includes multiple people using the same account, Barron's notes.
- Netflix did not specify an exact number of subscribers for the ad-tier as it aims attention away from customer counts and toward revenue growth.
Be smart: The $6.99 monthly plan is available now in 12 countries, including the U.S. — only about 6% of the total number of countries where Netflix is available.
- Hulu, which Netflix executives have held up as a blueprint for their ad-business, costs $7.99 a month with ads and $14.99 a month without.
- As of April 1, Disney reported 48.2 million total Hulu subscribers, roughly half of whom are reportedly paying for Hulu's ad tier.
- "It's a multibillion-dollar business for them already, and that's a domestic business, U.S. only," Netflix CFO Spencer Neumann said on an earnings call earlier this year.
Investors view Netflix's foray into ads as being off to a good early start.
- Shares closed up 9.2% today.
What to watch: The median age of Netflix's ad-tier audience is 34, some 20 years younger than average traditional TV viewers.
- Netflix also announced that more than one in four of its new subscribers have been signing up for the ad-option where it's available.
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