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Netflix's Cheaper Advertising Tier Reportedly Hits 1 Million U.S. Subscribers The streaming giant began offering a subscription plan for $6.99 a month in November.

By Gabrielle Bienasz

Opinions expressed by Entrepreneur contributors are their own.

Courtesy company
Greg Peters, co-CEO of Netflix.

Sometimes it pays to add...ads.

Streaming giant Netflix has reportedly reached about one million active monthly users on its cheaper, advertising-supported tier, according to Bloomberg.

That subscription plan, which was introduced in November, costs $6.99 a month and shows an average of four minutes of ads per every hour, depending on the show, the company says. Only one "device," i.e., screen, can be streaming at a time (this is unrelated to password sharing rules).

The next most expensive plan, Basic, clocks in at $9.99 a month, and offers no ads and the ability to watch on one device at a time. Standard and Premium, at $15.49 and $19.99, respectively, offer higher-quality streaming, and the ability to watch on two (standard) or four devices (premium) at a time.

Bloomberg viewed internal company data that showed the company reached this milestone "after its second month," which was December. The figure only included people in the U.S. and did not account for more than one person using an account, and the data is "at least a month old," the outlet wrote.

Related: All the Details of the Netflix Password-Sharing Update Nobody Wanted

Netflix laid off hundreds of employees in 2022 and, in April, reported losing subscribers for the first time in over 10 years. Around the same time, the company announced it would offer (after years of pushing back against the idea) a cheaper version of its subscription business supported by advertising. Netflix partnered with Microsoft for the advertising business for technology and sales.

Netflix also had some leadership changes. After being with the company since co-founding it, former co-CEO Reed Hastings stepped down in January. Ted Sarandos, who was already co-CEO and has been with the company since 2000, and Greg Peters, former COO, are the new co-CEOs.

The new advertising tier, which launched in November, reportedly struggled to meet viewer goals for advertisers and lagged behind competitors for signups for its ad tier, per The Verge. This makes this new data something of a comeback from that era, as the new data indicates users have increased markedly. Netflix had already told advertisers that signups for the advertising plan doubled in January compared to December, The Information previously reported.

Bloomberg noted that most people signing up for the ad plan are new subscribers and not people jumping from a more expensive plan. However, the company's password-share crackdown hasn't kicked in yet, which, could force hordes of people to find another way to access the service (like a cheaper tier, maybe) or stop using Netflix altogether.

In several other countries, Canada, New Zealand, Portugal, and Spain, customers will need to live where they watch (a "primary location") or pay extra, per the company's announcement in February.

Details on the U.S. rules have not yet been released.

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

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