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We recently shared with you the impressive figures for the 3rd quarter of 2024 from Netflix. And this success is notably due to its marketing strategy. In fact, in less than a year, Netflix’s ad-supported offering reached 70 million monthly active usersrevealing a craze for lower-cost entertainment alternatives. This success reinforces the strategy of the streaming platform which, with affordable prices, succeeds in attracting new subscribers and retaining existing ones. Deciphering an offer that could transform Netflix’s economic model.
The development of the Netflix subscription with advertisements
Launched at the end of 2022, Netflix’s offer with advertisements recorded spectacular growth reaching 70 million monthly active users. This figure represents an almost doubling compared to the 40 million users registered in May of the same year. The demand for this service shows the public’s growing interest in less expensive subscription plans.
Available for $6.99 per month in the United States, this plan now attracts more than half of new subscribers in the regions where it is offered. The ad-free option, priced at $15.49 per month, remains available but attracts fewer new users. This trend highlights the appeal for more affordable prices and could prompt Netflix to review its subscription options.
Netflix’s strategic choices for the future
Although the ad-supported option attracts a growing number of users, Netflix does not plan to position it as a driver of growth main before 2026. Currently, the company does not communicate specific details on the financial performance of this service, although some analysts believe that this offering could bring in more per user thanks to advertising revenue.
Some market observers suggest that Netflix could increase prices on its ad-free offerings to drive users toward the ad-supported plan. This strategy could strengthen profitability while offering users a financially accessible alternative to access content.
Advertising partnerships to increase attractiveness
As part of its development, Netflix has entered into a partnership with FanDuel for its NFL games scheduled for Christmas Day. This exclusive partnership offers a unique experience with analysis and predictions linked to FanDuel betting odds, integrated into the segments of the broadcast day.
Netflix also managed to sell out all the ad space for these two NFL games, partnering with several brands, including Verizon Communications. These collaborations reinforce advertisers’ interest in the platform, especially for live events which guarantee maximum visibility.
The launch of Netflix advertising technology in Canada
While Netflix has some problems with the law, for suspicion of tax fraud in France and Belgium, Canada has become the first country to deploy the entire advertising technology developed by Netflix. This initiative aims to test and optimize the functionalities before a global expansion planned by 2025. The success of this Canadian experiment could pave the way for a global application of the technology, thus optimizing the distribution of advertising content on the platform.
With this technology, Netflix aims to strengthen its attractiveness to advertisers while improving the user experience. Once the testing phase is complete, this innovation could revolutionize the way Netflix manages and integrates advertising in its different markets.
