Netflix drives shift to ad-supported streaming as growth comes from cheaper tiers
Updated
Updated · CNBC · May 10
Netflix drives shift to ad-supported streaming as growth comes from cheaper tiers
15 articles · Updated · CNBC · May 10
About 71% of new streaming subscribers over the past two years chose ad-supported plans, while 68% of subscribers now use them, according to Antenna and Deloitte.
Netflix says ad revenue is on track to hit $3bn in 2026, helped by its 325 million subscribers and 95 billion viewing hours in the first half of 2025.
Analysts say ad-tier users can approach or exceed premium-plan value as viewing rises, while price-sensitive consumers keep monthly streaming spending near $69 and resist further fee increases.
As ad-free becomes a luxury, will content quality on cheaper tiers decline to push users to upgrade?
With all streamers now chasing ad dollars, is the advertising market large enough to support them all profitably?
How will AI reshape our viewing experience beyond just serving us more relevant and interactive commercials?
Netflix’s Ad-Supported Model Hits 94 Million Subscribers, Driving Record Advertising Revenue in 2026
Overview
By early 2026, Netflix’s ad-supported streaming tier has become a pivotal growth engine, fundamentally reshaping the company’s business model. This strategic shift to include advertising was crucial, as the traditional subscription-only approach was no longer enough for long-term financial health. The ad-supported tier is now central to Netflix’s strategy, driving major gains in subscriber engagement, overall subscriber numbers, and advertising revenue. Recent earnings reports highlight the strong trajectory of this offering, with positive metrics showing high customer engagement and robust growth, confirming that advertising is now a key part of Netflix’s success.