Netflix’s advertising tier has defied its slow start to reach nearly 1 million active users in the US in two months, according to internal data seen by Bloomberg.
The user base grew by more than 500 percent in the first month from its launch and another 50 percent in its second month according to the reports.
Netflix has also fulfilled its forecasted deliveries to advertisers, according to people familiar with the deals. Netflix didn’t deliver as many viewers as it had promised advertisers in its first few weeks, prompting a spate of stories about the company’s rough.
The streaming platform built its advertising business in less than a year and introduced it with zero promotion. Marketers were allowed to take their money and reallocate it elsewhere.
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Experts worried that many current Netflix members might downgrade due to the new tier since there were 231 million paying subscribers as of last year. According to Bloomberg, this was not what Netflix anticipated. Yet even if it did, Netflix asserts that its revenue from subscribers on the advertising tier will eventually be at least as high.
According to reports, Most of the people signing up for the ad tier are new customers or lapsed customers, not people who immediately changed plans. The ad tier now accounts for about 20 percent of new sign-ups in the US, per Antenna.
The 1 million monthly active users include multiple people using one account, and that is only in the US. It’s also at least a month old.
With 74 million users in the US, it’s not expected for the company to have that many potential new viewers. However, analysts estimate the ad tier could bring in between 15 million and 30 million customers in the US, but not right away.
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