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Netflix The cheapest, ad-supported tier has amassed 40 million monthly active users worldwide, the company said Wednesday.
That's almost double the 23 million figure the streaming giant shared in January.
The company also said it would launch its own advertising platform and would no longer partner with Microsoft for that technology. The tech giant will remain a programmatic advertising partner, but will also be joined by other ad tech companies, including The Trade Desk, Google Display & Video 360 and Magnite.
Netflix will begin testing its ad technology platform in Canada later this year and plans to launch it in the United States at the end of the second quarter of next year. The company aims to have the platform available everywhere by the end of 2025.
The announcements came Wednesday in conjunction with Netflix's Upfront presentation, designed to attract advertisers. The streaming giant joined its media peers for the second time in making an annual proposal to secure advertising for its platform.
Earlier on Wednesday, the company said it reached a deal to broadcast two National Football League games on Christmas Day this year, and at least one matchup on the same day in both 2025 and 2026.
Netflix has the option of hosting one or two games in future years, with 2024 as a test, co-CEO Ted Sarandos told CNBC on Wednesday.
It marks Netflix's first real foray into live sports after years of resistance. Sports, particularly the NFL, have proven to be the glue that keeps traditional television intact and have also proven to be a boost for streaming services.
Terms of the deal with the NFL were not disclosed, but people familiar with the matter said Netflix will pay approximately $75 million per game. Spokespeople for the NFL and Netflix declined to comment.
The streamer will hire its own announcers for the games and partner with existing production companies. Sarandos told CNBC that he felt the NFL was the right choice because it matched the streamer's event strategy, allowing Netflix to effectively dominate the day.
Streaming advertising market
Netflix first introduced its ad-supported subscription plan in November 2022 as part of a broader effort to boost revenue amid slowing subscriber growth. That strategy included last year's crackdown on password sharing.
Since then, Netflix has moved at breakneck speed to grow its customer base with advertising, after being slow to join the pack. As part of that effort, Netflix got rid of its cheaper commercial-free plan in the US and UK.
The company said Wednesday that 40% of all registrations in countries that have the advertising tier available are for that cheaper plan. Netflix now has 270 million total subscribers.
For comparison, Disney's flagship service Disney+ has 117.6 million subscribers worldwide, while Warner Bros. Discovery's streaming unit, led by Max, has 99.6 million. Those two companies recently announced that they would offer a streaming package to prevent subscribers from abandoning their subscriptions and help them monetize their streaming businesses.
Meanwhile, nascent competitors are adding subscribers quarterly but still lag behind. Comcast's Peacock had 34 million customers in the most recent quarter, while Paramount Global's Paramount+ had 71 million.
Netflix's monthly advertising active user numbers come just a month after Netflix told investors it would no longer provide quarterly updates on subscriber numbers. The company said at the time that it was generating substantial profits and free cash flow and that membership was not the only factor in the company's growth. He said the metric became less important after he began offering multiple prices for memberships.
Meanwhile, linear television audiences continue to shrink and traditional media companies are looking to gain a foothold in the streaming space.
Legacy media companies have suffered in recent quarters as the advertising market collapsed due to fears of a recession and rising interest rates. Companies often reduce advertising spending during times of economic uncertainty.
But with a long road ahead in the streaming business, Netflix has established itself as a leader in the segment while many other companies struggle to make their streaming platforms profitable.
Disney executives recently referred to Netflix as the “gold standard” of streaming, and also noted that there has been additional supply in the advertising market due to a competitor that recently entered the game, likely referencing Netflix.
Media companies recently reported their quarterly earnings, which showed that the advertising market for traditional television is still weak, although it is improving. However, digital and streaming advertising has recovered.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
