Netflix is phasing out its cheapest ad-free plan in Canada and the U.K., with plans to do the same in the U.S. and France. Netflix added eight million global subscribers in Q2, with its ad-supported plan gaining significant traction.
The lower-priced tier now accounts for over 45% of new signups in markets where it’s available, signaling a potential shift in Netflix’s business model. The company is also testing pause ads, which appear when viewers pause content.
Netflix reported strong Q2 2024 results, surpassing projections with significant growth in revenue, profits, and subscribers.
- Revenue: $9.56 billion (up 17% YoY)
- Net income: $2.15 billion (up 44% YoY)
- Global subscribers: 277.65 million (up 16.5% YoY)
“Our ad revenue is growing nicely and is becoming a more meaningful contributor to our business,” Netflix stated in its earnings report. Starting next year, Netflix will change how it reports growth, focusing on revenue by region instead of subscriber numbers. The company warns of slower subscriber growth in Q3 2024 as the impact of paid sharing diminishes.
This shift “reflects the evolution of the business” as Netflix prioritizes advertising and subscriber retention.
Why we care. A higher proportion of subscribers are moving to the ad-supported tier, increasing the available ad inventory and creating more opportunities for advertisers to reach a broader audience.
About the author
Kim Davis is currently editor at large at MarTech. Born in London, but a New Yorker for almost three decades, Kim started covering enterprise software ten years ago. His experience encompasses SaaS for the enterprise, digital- ad data-driven urban planning, and applications of SaaS, digital technology, and data in the marketing space. He first wrote about marketing technology as editor of Haymarket’s The Hub, a dedicated marketing tech website, which subsequently became a channel on the established direct marketing brand DMN. Kim joined DMN proper in 2016, as a senior editor, becoming Executive Editor, then Editor-in-Chief a position he held until January 2020. Shortly thereafter he joined Third Door Media as Editorial Director at MarTech.
Kim was Associate Editor at a New York Times hyper-local news site, The Local: East Village, and has previously worked as an editor of an academic publication, and as a music journalist. He has written hundreds of New York restaurant reviews for a personal blog, and has been an occasional guest contributor to Eater.
