Netflix’s ad-supported tier isn’t chillin’

After years of saying ads would never make their way onto the platform, Netflix officially launched its $6.99/month ad-supported tier one year ago.

Today, the move is looking more successful than a sharply dressed Wall Street banker wearing a Rolex. The streaming giant revealed yesterday that its ad-supported tier has 15 million monthly active users, triple the number it had in May.

Behind the growth… Netflix has been hiking prices on its ad-free tiers in order to a) drive more revenue from those subscribers and b) try and prompt more people to sign up for its ads tier, where commercials help bring in more revenue per user.

And, much like Thomas the Tank Engine, it’s working.

• The monthly active users on Netflix’s ads tier increased 70% from Q2 to Q3.
• In countries where the ad plan was available, 30% of signups were for the ads-tier.

📸 Big picture: In order to experience ad-free premium content, it’s looking like consumers will have to pony up, Ponyboy. While streamers like Paramount+ and Peacock have recently raised prices on their ad-supported plans, most streamers – including Disney+, Hulu, Max, Discovery+, and, yes, Netflix – have been raising prices on their ad-free tiers while leaving ad-supported plans unchanged.