Netflix’s ad-supported tier continues to gain traction, even as the streaming giant saw slower subscriber growth in the second quarter. The company is expected to report a significant increase in ad revenue, driven by the strong adoption of its lower-priced plan. This comes as Netflix added an estimated 4.82 million subscribers in Q2, the lowest in five quarters. This is attributed to the end of the password-sharing crackdown and competition from summer sporting events.
To further drive growth, Netflix is investing in original content, acquiring popular shows from other networks, and partnering with companies like Comcast to bundle its service with others. They are also expanding their live content offerings, including streaming NFL games, to create more advertising opportunities.
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Netflix is building an in-house ad platform to offer marketers more targeted options and improved performance measurement. However, analysts believe the ad-supported tier won’t significantly impact revenue until 2025. Despite the positive signs, summer viewership for streaming services typically dips, and the Olympics are expected to draw viewers away from Netflix this year.