Netflix's ad-based plan boosts stock by 10%

Shares of Netflix experienced a 10% jump on Thursday following the company's announcement that its ad-supported plan had attracted five million active users. This figure suggests significant growth since March, when Bloomberg reported that the streaming service had one million active users after two months of offering the $7-per-month ad option. Netflix's upfront presentation did not disclose actual subscriber figures or revenue from the new tier. However, the company did reveal that its ad-based subscriber base had "more than doubled" since the start of 2023. Analysts estimated that the five million monthly active users reported by Netflix translates to two million to three million subscription accounts. Despite earlier concerns that the ad-based plan would prompt users to downgrade, Netflix's presentation indicated that a quarter of new sign-ups opted for the ad-supported offer. In the second quarter, Netflix plans to implement a password-sharing crackdown, which may result in some subscriber loss in the short term but is expected to boost subscriptions in the long run. It is worth noting that Mathias Döpfner, the CEO of Business Insider's parent company, Axel Springer, is a board member at Netflix.


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