Netflix's Ad-Supported Tier Surpasses 250 Million Users, Eyes Expansion into New Formats

Netflix Ad Tier Hits 250 Million Users, Revenue Soars

Netflix's ad-supported subscription tier has more than doubled its monthly active users for the second consecutive year, reaching over 250 million global viewers, the company announced during its 2026 upfront presentation. This marks a dramatic jump from 94 million users reported last year, signaling rapid adoption of the cheaper, ad-included plan.

The streaming giant also disclosed that it generated $1.5 billion in ad revenue in 2025, a figure that is expected to climb as Netflix introduces new advertising surfaces across its platform. Starting next year, the company will place ads within its recently launched vertical video feed on mobile devices and within its growing library of podcasts, which began rolling out in late 2025.

Expanding Ad Inventory

“Integrating ads into vertical video and podcasts allows us to meet advertisers where viewers are spending more time,” said Netflix’s head of advertising, Jeremi Gorman, in a statement. “These formats are highly engaging and offer new opportunities for brand integration beyond traditional shows and movies.”

The vertical video feed, similar to TikTok-style short clips, was introduced earlier this year on Netflix’s mobile app. Podcasts have also become a key part of the service, with exclusive deals for popular series. Both formats are expected to draw significant user attention, making them attractive for ad placements.

Background

Netflix first launched its ad-supported tier in late 2022 at $6.99 per month (now $8.99), after years of resisting advertising. The move was a strategic shift to attract cost-conscious subscribers amid increased competition and a slowdown in subscriber growth. The tier has since become a major growth driver, with over 40% of new sign-ups in some regions choosing the ad plan.

The company’s upfront presentation this year emphasized its commitment to scaling ad revenue. Executives noted that the ad tier now accounts for a significant portion of Netflix’s total subscriber base, though exact numbers have not been disclosed. Competitors like Disney+ and Amazon Prime Video have also launched ad-supported options, intensifying the battle for TV ad dollars.

What This Means

Netflix’s aggressive expansion of ad inventory signals a fundamental shift in its business model, moving from a purely subscription-driven revenue stream to a hybrid model that blends subscription and advertising income. For advertisers, the platform offers access to a highly engaged audience across multiple content formats, including linear-style shows, short-form video, and audio.

“Netflix is becoming a must-buy for anyone serious about streaming advertising,” said Michael Nathanson, senior media analyst at MoffettNathanson. “The growth in reach and new ad placements make it a formidable competitor to YouTube and traditional TV networks.” However, some users may resist ads in newer, more personal formats like vertical video and podcasts, which could impact user experience.

The expansion also positions Netflix to capture a larger share of the $100 billion global TV advertising market. With 250 million monthly active users on the ad tier, the company is now one of the largest ad-supported streaming platforms worldwide. Future growth may depend on how well it balances ad load with user satisfaction, especially as it tests more intrusive ad formats.

Netflix plans to provide more details on ad targeting capabilities and measurement tools in the coming months, aiming to lure advertisers with data-driven solutions similar to those offered by digital platforms. The company’s upfront presentation highlighted partnerships with major ad-tech firms to improve ad relevance and return on investment for brands.