Streaming giant Netflix is ​​set to make a significant change to its subscription model by launching a free, ad-supported subscription in select Asian and European markets. This new offering aims to expand Netflix's audience by providing access to its extensive content library at no cost, which is in line with the company's strategy to expand its user base and compete with local free TV services. The Bloomberg report highlights that Netflix's initiative is aimed at regions where ad-supported free-to-air TV networks are already prevalent. Insiders say the plan is designed to attract more viewers and strengthen Netflix's competitive edge against regional free-to-air TV offerings. For advertisers, the introduction of the free plan is expected to significantly increase viewership, resulting in increased ad revenue for Netflix. The company is also working on developing its ad tech platform, which is expected to launch by the end of 2025. The platform is expected to provide advertisers with enhanced tools to buy ads, gain insights and measure campaign effectiveness.

Netflix recently reported a significant increase in ad-supported adoption, with monthly active users worldwide rising to 40 million from 5 million a year ago. The huge growth highlights the success of Netflix's strategy of attracting new subscribers through more affordable plans.

The expansion of the ad-supported tier comes at a time of intense competition in the streaming industry, with companies increasingly offering bundled services to retain subscribers. Netflix's ad-supported programs have been hugely popular since launching in November 2022, with 40% of all new sign-ups in eligible countries coming from them.

In particular, Antenna's research shows that ad-supported plans were the main source of new users in the streaming industry in the fourth quarter, the first time such a trend has been observed. Netflix has announced plans to roll out an in-house ad technology platform by the end of 2025 as part of its ongoing efforts to improve its advertising capabilities. To accelerate automatic ad buying, Netflix will partner with industry leaders such as Trade Desk, Google Display & Video 360, ad tech company Magnite and Microsoft.

Netflix's ad-supported plan is priced at $6.99 per month, providing a competitive alternative to other streaming services. By comparison, monthly plans for Warner Bros Discovery's streaming service Max start at $9.99, while Walt Disney's Disney+ subscription starts at $7.99 a month.