Netflix's advertising subscription users have a monthly active user base of over 40 million and will launch its own advertising platform

According to Zhitong Finance APP, Netflix (NFLX.US) announced this Wednesday that the ad-supported subscription tier currently has over 40 million monthly active users globally, with 40% of registered users in markets with the ad tier signing up for cheaper plans. This number is nearly double the 23 million figure disclosed by the streaming giant in January. The company also stated that it will launch its own advertising platform and no longer collaborate with Microsoft on this technology. While the tech giant will remain a programmatic advertising partner, other ad tech companies including The Trade Desk, Google Display & Video 360, and Magnite will also join. Netflix will begin testing its ad tech platform in Canada later this year and plans to roll out the platform in the US by the end of the second quarter next year. The company aims to have the platform operational in all regions by the end of 2025. Netflix also held an early showcase aimed at attracting advertisers. This marks the second time the streaming giant has joined the ranks of media peers to secure ads for its platform. Earlier on Wednesday, the company announced agreements to air two National Football League (NFL) games this Christmas and at least one game on the same day in 2025 and 2026. Netflix Co-CEO Ted Sarandos told the media on Wednesday that Netflix could choose to host one to two games in the coming years, with 2024 serving as a test. This marks Netflix's first foray into live sports broadcasting after years of resistance. Sports, especially the NFL in the US, has been proven to be the glue that keeps traditional TV intact and a driver for streaming services. The terms of the deal with the NFL have not been disclosed, but sources familiar with the matter say Netflix will pay around $75 million per game. The company will hire its own commentators for the games and collaborate with existing production companies. Sarandos believes the NFL is the right choice as it aligns with Netflix's content strategy, effectively giving Netflix ownership of the day. Streaming Advertising Market Netflix first introduced ad-supported subscription plans in November 2022 as part of broader efforts to increase revenue amid slowing user growth. This strategy includes cracking down on password sharing last year. Since then, Netflix has been rapidly growing its ad-supported customer base, although it acknowledges the slow pace of joining this group. As part of this effort, Netflix discontinued its cheapest ad-free plans in the US and UK. The company stated on Wednesday that in countries offering ad plans, 40% of registered users opted for cheaper plans. Netflix currently has 270 million users. In comparison, Disney's flagship service Disney+ has 1.176 billion users globally, while Warner Bros. Discovery's streaming division led by Max has 99.6 million users. Both companies recently announced they will offer streaming bundle services to prevent churn and help drive profitability in their streaming businesses Meanwhile, competitors who are still growing their subscriber base are falling behind. As of the most recent quarter, Comcast's "Peacock" has 34 million customers, while Paramount Global's "Paramount+" has 71 million customers. Just a month before Netflix announced monthly active ad-supported user data, the company informed investors that it would no longer provide quarterly subscriber updates. The company stated at that time that it was generating significant profits and free cash flow, and that subscriber numbers were not the sole factor driving the company's growth. The company indicated that this metric lost its significance as it began offering members multiple price points. At the same time, linear TV viewership continues to decline, and traditional media companies are seeking to establish themselves in the streaming space. Due to concerns about economic recession and rising interest rates, the advertising market collapsed, causing traditional media companies to suffer heavy losses in recent quarters. During times of economic uncertainty, companies typically cut back on advertising spending. However, as Netflix still has a long way to go in its streaming business, it has established itself as a leader in the field, while many other companies are striving to make their streaming platforms profitable. Disney executives recently referred to Netflix as the "gold standard" of streaming and noted that with recent entrants into the field, the supply in the advertising market has increased, possibly pointing to Netflix. Quarterly earnings reported by media companies recently show that the traditional TV advertising market, while showing some improvement, remains weak. However, digital and streaming advertising have been on the rebound