Netflix says new ad-supported tier is doing well so far

The low-cost membership launched in November

Netflix app on phone

Netflix claims its lower-cost, ad-supported membership has been performing well so far.

Speaking to Variety during the just-wrapped CES 2023 in Las Vegas, Jeremi Gorman, Netflix’s president of worldwide advertising, spoke more about how the ‘Basic with Ads’ subscription has fared since its November 2022 launch.

According to Gorman, Netflix is “pleased with the growth we’re seeing” in regards to Basic with Ads. For $5.99 CAD/month, the membership plays around four to five minutes of ads per hour across the majority of movies and shows.

Per December Antenna data, first reported by The Wall Street Journal, only nine percent of U.S. Netflix sign-ups in November were for Basic with Ads, making it the least popular option. The company was also said to have failed to meet its minimum viewership guarantee to advertisers, leading it to have to return money to them.

Basic with Ads launched in many countries beyond the U.S., including Canada, the UK, France, Germany, Spain, Italy and Japan. Therefore, assuming the Antenna data is accurate, it does only cover one market, and in the first month, no less. That said, without Gorman providing any actual data, it’s hard to see through the marketing speak. (At one point, she simply told Variety “You would be able to see if I was a concerned human [regarding Basic with Ads’ performance] — I wear it on my face.”)

In any case, Basic with Ads came amid an indisputably rough patch for Netflix in which it saw first-ever subscriber losses and increasingly stiff competition from the likes of Disney+ and HBO Max. The company has also developed a reputation for cancelling shows, which has only further alienated some consumers. Therefore, Basic with Ads is intended to help drive growth by bringing in new members.

Netflix’s next quarterly earnings report is set for January 19th, so it’s possible the streamer may talk more about the ad-supported tier then.

Source: Variety