The start of an advertising-supported tier for Netflix has seen a modest initial take-up with 9% of sign-ups for the basic with ads package, according to analysis by subscription watcher Antenna.
However, there's good news on fears the move to advertising would cannibalise Netflix's strong paid susbcriber base.
Just 0.1% of Netflix’s existing US subscribers switched to the basic with ads plan in November.
The slow startup isn't unexpected.
Netflix had, when announcing advertising, said that the process would be a "crawl, walk, run" taking years to fine tune the model.
Antenna: "Netflix’s announcement that it would launch an ad-supported option was a major validation that the 'dual revenue stream mode' which has always fueled pay TV will persist in the streaming world.
"So there is understandable interest in early traction for the offering, which just launched November 3.
"Antenna’s data suggests a modest start. Antenna finds that 9% of Netflix sign-ups in the US in November were to the Basic with Ads plan, making it the least popular of their plan options."
Antenna says HBO Max also saw a mild pickup when it first launched its ad-supported option in June 2021.
The advertising-supported version of Netflix launched last month in Australia with an average of four to five minutes of ads per hour, with susbcriptions starting at $6.99 a month, $4 a month lower than the basic plan of $10.99.
Netflix overturned a long held policy of being advertising free after subscription growth started to fall.
Many analysts believe Netflix can achieve better profitability by adding advertising revenue to its subscription fees.
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