Netflix is reportedly about to experiment with placing ads in the middle of its programming.
The streaming service has created interactive “mid-roll” and pause ads that incorporate generative artificial intelligence (AI), the publication Media Play News reported Wednesday (May 15) from the company’s upfront to advertisers.
“[Netflix] members pay as much attention to midroll ads as they do to the shows and movies themselves,” said Amy Reinhard, president of advertising at Netflix.
Reinhard said that Netflix’s $7.99 monthly ad-supported subscription tier now has 94 million subscribers worldwide, up from 70 million in November and 40 million ad-supported subscriptions a year ago. This less-expensive option now accounts for half of all new Netflix subscribers, the report added.
The company launched an ad-supported option in November 2022. Reinhard said Wednesday that ad-supported subscribers spend around 41 hours per month on the platform.
“When you compare us to our competitors, attention starts higher and ends much higher. And even more impressive, members pay as much attention to mid-roll ads as they do to the shows and movies themselves,” she said.
The new ad-supported plans come at a time when the subscription industry is witnessing a shift to more flexible and diverse pricing models, as PYMNTS wrote earlier this year.
“Tiered pricing remains a cornerstone strategy, with companies like Netflix and Spotify offering different levels of access and features to accommodate varying customer needs and budgets,” that report said. “This allows for personalized offerings and maximizes potential revenue.”
Research by PYMNTS Intelligence shows that 46% of consumers are “deal chasers” and will swap services to get a better deal, while other consumers can be enticed away from being loyal customers with a more affordable price.
Meanwhile, Netflix Co-CEO Ted Sarandos last month outlined the streaming giant’s vision for growth, which includes the goal of diversifying beyond online streaming while still expanding its core business.
During the Semafor World Economy Summit 2025, Sarandos was asked how Netflix plans to reach its goal of becoming a trillion-dollar company, which seems difficult to achieve unless they expand beyond streaming.
Sarandos first doubled down on opportunities in its core business, noting that Netflix captures only about 5% of consumer spending and 10% of TV watching time in its most mature markets. Thus, there is “enormous room to grow just in the things that we do,” Sarandos said.
Source: https://www.pymnts.com/
