Netflix (NASDAQ:NFLX) said yesterday that its ad-supported tier has reached almost 5 million active users per month.
This represents a significant increase compared to the ~1M reported by third parties. Netflix launched a $7-per-month option with commercials last November as an alternative to its ad-free plan that starts at $10 a month.
Netflix’s management provided an update during the event that is used by networks to attract advertisers. The “Upfront” presentation and Q&A session left analysts increasingly more positive on the company.
“NFLX has been a top pick, and we come away incrementally more positive on the ad tier progress, given lack of prior disclosure,” said Oppenheimer analysts.
Netflix also said that ad-tier now represents 25% of new subscribers in respective geographies. The company’s management told advertisers that its viewers are 4 times more likely to engage with an ad on Netflix than on the other streaming platforms.
"No other entertainment company aspires to create great movies and shows across so many genres in so many countries, and for such a broad, diverse audience," said Bela Bajaria, chief content officer for Netflix.
Evercore ISI analysts reiterated an Outperform rating as new updates show ad-supported tier is “steadily gaining traction.”