Emily Rudd as Nami, Inaki Godoy as Monkey D. Luffy, and Jacob Romero as Usopp in Season 2 of Netflix’s "One Piece."
Netflix
Two things still stand out to me from the last time I interviewed Netflix co-founder Marc Randolph several years ago. I remember, for one thing, that we talked about Netflix’s history and Randolph’s early days with the company — and also his insistence to me that the streaming giant would never get into the ads game. At that point, it still seemed like subscriptions would be Netflix’s primary revenue driver for years to come.
“Ads,” Randolph insisted to me at the time, “are a distraction, never an additive thing.”
If that’s true, though, someone forgot to tell Netflix.
The thing its co-founder once dismissed as unnecessary has actually become one of the company’s biggest growth engines today. Netflix revealed this week during its annual advertising upfront presentation that its ad-supported tier now reaches more than 250 million monthly active viewers worldwide — a staggering audience that’s grown from roughly 70 million users in 2024 and large enough that, if it were a country, it would rank among the biggest on the planet.
Close-up detail of the Netflix app icon on an Apple iPhone screen.
Future Publishing via Getty Images
“If the last couple of years were about proving we’re a durable player,” Netflix advertising president Amy Reinhard said during the presentation, “this year is about establishing ourselves as a formidable one.”
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She also made clear that Netflix no longer sees advertising as a side business. “We’ve got cutting-edge technology, we’ve got great entertainment across shows, movies, podcasts, and live events, and we’ve got the most engaged and attentive audience.
“We’ve proven we’re effective, and now we’re expanding ads to more places and we’re ready to compete with anyone.”
Let’s pause here for a moment for an important bit of context. Because this expansion into ads is actually one of the throughlines you can’t help noticing over time from Netflix. I’ve covered the company for years, in addition to interviewing both co-founders — Randolph, as well as Reed Hastings — on various occasions. Which is to say, I’ve seen myself how so many of their and the company’s supposed non-negotiables over time, ranging from advertising to theatrical releases, have given way to strategic reversals.
Ads, in fact, represent one of the biggest about-faces for Netflix, given that choosing to go down this road required the company building an entirely new infrastructure — from ad tech and measurement tools, to sales teams and advertiser relationships. And as for where the streamer’s ad business is now, the scale is difficult to overstate.
A 250 million-strong audience makes Netflix’s ad tier roughly in line with the population of Brazil. And it’s still growing.
Netflix said this week that more than 80% of ad-tier subscribers watch the service every week, while around 60% of new subscribers are now choosing the cheaper ad-supported plan when they sign up. The streamer also announced plans to expand its advertising tier into 15 new countries in 2027.
Netflix has also quietly been reshaping the economics of its service to nudge more people toward ads.
As I reported in March, the streamer raised prices across every U.S. tier for the second time in a little over a year. But while Netflix hiked its Standard ad-free tier by $2 to $19.99 and pushed the Premium tier up to $26.99, the ad-supported plan only went up by $1, to $8.99 per month.
Making the ad tier feel more attractive to subscribers in that way arguably does something very important.
The streamer can certainly continue to extract more subscription revenue from less price-conscious users. On the ad tier, though, paying subscribers are also being monetized through ads — giving Netflix two revenue streams from the same customer, instead of just one.
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