Netflix says its ad tier has 40M MAUs, up from 23M in January 2024, and plans to launch its own ad platform and no longer partner with Microsoft for that tech
Context & Ripple Effects
Netflix’s ad plan had already moved from 15M monthly active users in November 2023 to more than 23M in January, making the 40M figure evidence of continued early adoption rather than a one-off launch bump.
The decision also follows reports that Netflix was reworking its advertising technology arrangement with Microsoft. The company is now pairing audience growth with a plan to bring the underlying ad platform in-house.
First-order effects
- Netflix gains direct control over the technology used to serve advertising on its service, while Microsoft is set to lose its role as the ad-tech partner.
- The 40M-user ad tier gives Netflix a larger immediate audience base on which to introduce its own advertising platform.
Second-order effects
- Advertisers and agencies buying Netflix inventory will need to adapt to Netflix’s platform and commercial processes rather than relying on Microsoft’s technology relationship.
- Netflix assumes more responsibility for the pace and quality of advertising-product development, tying its ability to monetize the growing ad audience more closely to its own execution.
Third-order effects
- If large streamers continue building proprietary ad infrastructure, ad-supported streaming could shift from outsourced technology partnerships toward vertically integrated audience-and-ad-sales businesses.
- The move illustrates how lower-priced ad plans can become strategic distribution products, not simply subscription discounts: scale can justify dedicated advertising operations even as services manage potential bundle cannibalization.
The trend: Streaming services are using the scale of ad-supported viewing to internalize more of the advertising stack and compete more directly for ad budgets.