Netflix is upgrading its ad-supported plan in terms of streaming quality and simulcasting. The company said that users subscribed to this plan will be able to view content in 1080p resolution (instead of 720p) with support for two simultaneous streams.
These benefits are rolling out to users in Canada and Spain today. People using ad-supported plans in 10 other markets, including the US, will get these features this month.
“We believe these enhancements will make our offering even more appealing to a broader set of consumers and further strengthen the engagement of new and existing subscribers in the ad plan,” the company said in its letter to investors.
netflix launch the plan with advertising last November at $6.99 per month and is already seeing positive results.
The streaming company said that in the US it is getting more average membership revenue through the ad-supported plan than the standard plan, which costs $15.99 per month.
During the earnings call, Netflix CFO Spence Neumann said the company released new content at the ad-supported level in the last quarter, bringing it to “95% more” parity with other higher-priced plans. .
He mentioned that the ad-supported plan is also showing beneficial results for the business,
“This [economics of the ad-supported plan] it’s all at a level that we think is not only better for our members with a lower price option but better for our business and we think we could do it and we’re doing it in a way that is, I would say, without getting too specific, think in it as an incremental profit contribution of 50% or more to the business,” he said.
According to Insider Intelligence, Netflix will generate $770 million in ad revenue this year, and this number will rise to $1.9 billion in 2024.
Netflix ad revenue Image Credits: internal intelligence
The firm expects Netflix to have 170.6 million users (a 0.5% year-over-year drop) in the US and 682.7 million users worldwide (5.6% year-over-year increase) by the end of the year. of year.
The company also revealed plans to rolling out restrictions on password sharing more broadly this summer. The company posted $8.16 billion in revenue for the first quarter of 2023, slightly below analyst expectations of $8.18 billion.