Netflix is preparing to introduce a significant change to its subscription model by rolling out a free, ad-supported plan in specific Asian and European markets. This move is aimed at broadening Netflix’s audience by granting access to its vast content library at no charge, aligning with its strategy to expand its user base and compete with local free TV services. The streaming platform aims to target regions where free, ad-supported television networks are prevalent, intending to attract more viewers and enhance Netflix’s competitive stance against regional free TV options.

The introduction of a free plan is expected to result in a substantial increase in viewership, thereby generating higher ad revenue for Netflix. Concurrently, Netflix is developing its own advertising technology platform, set to launch by the end of 2025. This platform aims to provide advertisers with advanced tools for ad purchasing, insights gathering, and campaign effectiveness measurement.

Recent data from Netflix reveals a significant surge in adoption of its ad-supported tier, with global monthly active users increasing to 40 million from just five million a year earlier. This growth underscores the success of Netflix’s strategy to attract new users with a more affordable plan.

Amid fierce competition in the streaming industry, where companies are bundling services to retain subscribers, Netflix’s ad-supported plan, launched in November 2022, has gained substantial traction. Approximately 40% of all new sign-ups in eligible countries are opting for these plans, according to reports.

Notably, research from Antenna indicates that during the fourth quarter, ad-supported plans drove the majority of new subscribers in the streaming industry, marking a significant shift in consumer behaviour.

To enhance its advertising capabilities further, Netflix plans to launch an internal advertising technology platform by late 2025. This strategic move aims to offer clients innovative methods for ad procurement and user engagement. The company plans to expedite automated ad buying by partnering with industry leaders such as Trade Desk, Google Display & Video 360, Magnite, and Microsoft.