Netflix’s Ad Tier Is Here: VIP+ looks at the short-term hurdles and long-term rewards for the streamer’s shifting business model
Another major transformation is at hand for the ever-changing streaming landscape. An ad-supported, or AVOD, version of Netflix isabruptly demolished
that longstanding pillar of his corporate philosophy in April, Netflix has completed a remarkable sprint to the finish line, building and launching an ad business in less than seven months. Now, the streamer is hoping the cheaper “Basic With Ads” tier, priced at $6.99 per month, can help fuel greater subscriber and revenue growth following aThere’s plenty of evidence indicating the AVOD tier represents a significant opportunity for Netflix.
Of course, this will depend on whether Netflix can build a large enough audience for its AVOD tier, but the streamer seems well positioned in that regard despite its recent subscriber struggles. Netflix not only still commands the largest subscriber total of any streaming platform, but consistently captures the largest share of domestic connected TV viewing time for any single SVOD service each month, per Nielsen data.
As ad impressions become an integral part of Netflix’s business model, time spent will be an increasingly crucial metric, and the Big Red N dominates in that area: The most recent available data, from September, showed Netflix accounted for 7.3 percent of all TV viewing that month in the U.S.; the next closest SVOD was Hulu, with 3.8 percent .
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