8 Times Increase Compared to Last Year and Double Since Early This Year
"Success Factors Include Affordable Subscription Fees and Active Investment in Content"
Expanding Advertising Market by Securing WWE and NFL Broadcast Rights
The ad-supported subscription plan of the global online video platform (OTT) Netflix is reportedly progressing smoothly, contrary to concerns. This is attributed to its lower subscription fee compared to competitors and active investment in content.
According to CNBC on the 15th (local time), Netflix announced that the global monthly active users (MAU) of its ad-supported tier surpassed 40 million. This figure is eight times higher than a year ago (5 million) and nearly double the MAU of 23 million revealed in January this year.
On the same day, Netflix also announced a strategy to make the ad-supported tier a new revenue source. The company plans to end its technical collaboration with Microsoft (MS), which had been in place to implement the ad-supported tier, and develop its own advertising platform. Additionally, aiming for a global launch in 2025, Netflix will begin testing advertising platform technology in Canada from the end of this year in partnership with companies such as Google Display & Video 360.
CNBC cited Netflix’s lower subscription fee compared to competitors and active content investment as key factors behind the success of its ad-supported tier. In the U.S., the Netflix ad-supported plan is priced at $6.99, which is cheaper than competing OTT services like Max ($9.99) and Disney+ ($7.99). Currently, Netflix has a total of 270 million subscribers worldwide, and in countries where the ad-supported tier is available, 40% of subscribers use this plan.
Netflix is also expanding into the sports broadcasting business to grow its advertising market. On the same day, Netflix announced plans to broadcast National Football League (NFL) games, the most popular sport in the U.S., during the Christmas season for three years starting this year. Although specific contract terms were not disclosed, Bloomberg estimated that Netflix will pay less than $150 million (approximately 190 billion KRW) per game. Previously, Netflix secured exclusive broadcasting rights for the World Wrestling Entertainment (WWE) program 'RAW'.
In response to Netflix’s dominant position, latecomers are forming alliances. On the 8th, CNBC reported that The Walt Disney Company and Warner Bros. Discovery will join forces in the streaming business to launch a bundled product. Subscribers to the bundle will be able to enjoy content from Disney+, Hulu, and Max. Earlier, Disney, Warner Bros., ESPN, and Fox also announced plans to jointly launch a sports streaming service this fall.
Meanwhile, Netflix’s stock price on the New York Stock Exchange closed slightly down at $613.52 compared to the previous session. It has risen 26% so far this year.
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