September 14, 2022
Netflix — which is set to launch a less-expensive ad-supported subscription streaming VOD service in the fourth quarter to rival a similar service Disney+ is launching in December — expects to generate upwards of 40 million ad-supported global subscribers by late 2023, according to a report by The Wall Street Journal.
The paper cited the streamer’s own estimates given to ad buyers and reviewed by the media outlet.
Netflix, which is selling ads on the platform to marketers through an agreement with Microsoft, reportedly expects to generate 4.4 million subs by the end of this year, including 1.1 million in the United States. The 40 million global subs include 13.3 million in the United States.
The ad-supported markets also include Brazil, Mexico, Japan, the United Kingdom, France, Germany, Korea, Spain, Italy, Australia and Canada.
The sub growth projections are ambitious considering Netflix’s existing SVOD service subscriber growth has stagnated at around 220 million, with the platform losing significant numbers of subs across all of its markets except the Asia Pacific region in the most recent fiscal period, ended June 30.
The streaming pioneer heretofore rejected advertising on its platform, arguing ongoing SVOD subscriber growth negated the need for a less-expensive tier with ads. Then came fiscal 2022, when Netflix reported subscriber losses in both quarters of the first half, including an unexpected 200,000 sub loss in Q1 after it had projected a sub gain of around 2.5 million.
“We are still in the early days of deciding how to launch a lower-priced, ad-supported tier and no decisions have been made,” Netflix said in a media statement.