Sources: Netflix told advertisers that sign-ups for its ad tier doubled in January 2023 over December 2022; Netflix predicted 1.75M ad tier subscribers in Q1
Sahil Patel / The Information : See also Mediagazer
Context & Ripple Effects
This is the first hard read on whether Netflix's ad tier, launched in late 2022, was actually pulling sign-ups: a month in, sources say the company told advertisers January sign-ups doubled over December, and it put a number on the quarter — 1.75 million ad-tier subscribers. The audience for that claim is advertisers, who had committed upfront-style budgets against an unproven product.
The arc that follows validates the bet. Within weeks Netflix reported the tier hit ~1M US MAUs and fulfilled its forecasted deliveries to advertisers, then compounded through 2023-2024 — 23M+ MAUs by January 2024, 70M users by November 2024, and 250M+ monthly active viewers by 2026 with expansion into 15 more countries. This January-doubling report is the earliest data point in that trajectory.
First-order effects
- Netflix's advertisers now have a quantified growth trajectory to hold the company to — the 1.75M Q1 forecast converts a soft pitch into a delivery commitment, the same accountability structure that was tested when the tier later met its forecasted deliveries after reaching ~1M US MAUs.
Second-order effects
- If the doubling trend holds, ad budgets shift toward Netflix's tier faster than planned, pressuring Netflix to scale ad inventory and targeting quickly — the pressure that later shows up as ad personalization testing once the tier reached 250M+ viewers.
Third-order effects
- A doubling month-over-month at launch points to the structure the later numbers confirm: the ad tier becoming the majority of new sign-ups (over 45% by mid-2024, 50%+ by Q3 2024), making Netflix's growth engine advertiser-funded rather than purely subscription-funded — a structural shift for the whole streaming category's pricing models.
The trend: Streaming growth is migrating from premium ad-free plans to ad-supported tiers, with Netflix's advertiser-facing delivery forecasts setting the accountability template the rest of the industry is following.