Report: Ad-tier now 15% of Netflix UK user base
August 7, 2024
The uptake of Netflix’s ad tier in the UK continues to grow, according to Ampere Analysis. By the end of June 2024, ad-tier users accounted for 15 per cent of Netflix’s UK user base, surpassing the 11 per cent proportion of the streamer’s ad-tier users in the US.
Ad-tier sign-ups have been largely driven by consumers who subscribe to Netflix as a standalone service in the UK. In 2024, 50 per cent of new ad-tier subscribers did not have any other SVoD services when they signed up. In contrast, ad-tier sign-ups in the US are more likely to have multiple other subscription services. This indicates that the ad tier in the US is more effective in attracting heavy SVoD users, who use the cheaper ad tier to stack multiple services, suggests Ampere Anaylsis, in the report authored by Research Manager Lottie Towler. Conversely, in the UK, the ad tier has been particularly effective in capturing consumers who previously did not subscribe to any SVoD service, likely due to its lower price point.
This trend is supported by Ampere’s Consumer data, which shows that UK respondents who only subscribe to Netflix, and no other SVoD services, who agreed with the statement “I would be willing to see some/more adverts if it made the price of a video-on-demand service I already have, or am planning to subscribe to, cheaper” skew towards lower income brackets.
The differing motivations for sign-up between US and UK audiences also result in different attitudes toward subscriber loyalty. Among those who signed up to Netflix’s ad tier in 2023, UK subscribers exhibited a lower churn rate (14 per cent) compared to the US (20 per cent) after 100 days, highlighting that users who subscribe to multiple services in the highly fragmented US market are generally less loyal than those with just one or two SVoD services in the UK.
The cheaper ad tier has also allowed Netflix to capture a distinct consumer group in the UK. As the dominant service in both the US and UK, Netflix was historically taken as a standalone service by a significant portion of the market. However, as new services launched and gained traction, stacking rates increased, and the proportion of Netflix-only households declined steadily in both regions. The introduction of the ad tier has reversed this trend in the UK, resulting in growth of Netflix-only households since Q3 2022, reaching 14 per cent of UK respondents by Q1 2024.