Netflix Ad-Supported Tier Surges Past 250 Million Monthly Users
Netflix's ad-supported tier reaches 250 million monthly active users, driving advertising revenues toward $3 billion this year despite a slowdown in core growth.
What began as a budget-friendly option for Netflix subscribers is rapidly evolving into one of the streaming giant's most compelling revenue engines. The ad-supported tier already attracts more than 250 million active viewers monthly, up from just about 190 million last November. This sharp surge is leading the company to estimate that its advertising revenues will double during the year, reaching approximately $3 billion.
Advertising Growth and Market Expansion
In the market, it is believed that this is only the beginning. According to forecasts, the amounts Netflix receives from advertisers could already surpass the $6 billion mark by 2027. The optimism relies, among other things, on the behavior of new joiners: in countries where the discounted tier is offered, more than 60% of new customers prefer the option combining ad viewing. Over 80% of tier users watch content at least once a week.
The company does not stop at markets where the service already exists. Next year, an expansion to 15 additional countries is planned, including Sweden, Poland, Indonesia, and the Philippines. Currently, the option is available in 12 countries. For advertisers, the expansion may open the door to additional audiences, some of whom no longer consume regular television broadcasts.
Untapped Potential and Slowing Core Engines
Yet behind the impressive data hides a potential that Netflix has not yet fully realized. When dividing an expected annual income of about $3 billion among 250 million viewers, a monthly return of nearly one dollar per user is obtained. By comparison, the monthly price of the ad-supported tier in the United States stands at $8.99. The gap indicates that the company can still raise advertising space prices and increase the profit generated by each viewer. A positive sign for it comes from the American market, where advance commitments by advertisers nearly doubled this year.
The strong push for advertising activity comes precisely when the company's other engines are losing momentum. The revenue growth rate, which stood at 17.6% in the last quarter of 2025, dropped in the second quarter of the year to 13%. The forecast for the third quarter points to further deceleration, to a pace of 11.7%.
Total viewing volume also does not show a significant breakthrough. During the first half of the year, 97 billion viewing hours were recorded, a mere 2% improvement compared to the parallel period last year. Therefore, although advertising may generate billions of dollars for Netflix, it is still not expected to replace subscription fees as the primary source of income.
Even if the 2027 forecast materializes, advertising activity will be responsible for only about a tenth of the total turnover. Netflix stock trades around $77, according to a multiple of about 20 relative to expected profits in 2027. The pricing may not be unusual, but the weakening in activity unrelated to advertising leaves a question mark around the company's ability to maintain a high expansion pace.
