Insider Intelligence delivers leading-edge research to clients in a variety of forms, including full-length reports and data visualizations to equip you with actionable takeaways for better business decisions.
In-depth analysis, benchmarks and shorter spotlights on digital trends.
Learn More
Interactive projections with 10k+ metrics on market trends, & consumer behavior.
Learn More
Proprietary data and over 3,000 third-party sources about the most important topics.
Learn More
Industry KPIs
Industry benchmarks for the most important KPIs in digital marketing, advertising, retail and ecommerce.
Learn More
Client-only email newsletters with analysis and takeaways from the daily news.
Learn More
Analyst Access Program
Exclusive time with the thought leaders who craft our research.
Learn More

About Insider Intelligence

Our goal at Insider Intelligence is to unlock digital opportunities for our clients with the world’s most trusted forecasts, analysis, and benchmarks. Spanning five core coverage areas and dozens of industries, our research on digital transformation is exhaustive.
Our Story
Learn more about our mission and how Insider Intelligence came to be.
Learn More
Rigorous proprietary data vetting strips biases and produces superior insights.
Learn More
Our People
Take a look into our corporate culture and view our open roles.
Join the Team
Contact Us
Speak to a member of our team to learn more about Insider Intelligence.
Contact Us
See our latest press releases, news articles or download our press kit.
Learn More
Advertising & Sponsorship Opportunities
Reach an engaged audience of decision-makers.
Learn More
Browse our upcoming and past events, recent podcasts, and other featured resources.
Learn More
Tune in to eMarketer's daily, weekly, and monthly podcasts.
Learn More

Why Netflix Basic With Ads will win advertisers

Despite the Basic With Ads subscription tier being released just two weeks ago, we’re forecasting Netflix will see US ad revenues of $830 million in 2023, growing to $1.02 billion in 2024. It’s an impressive acceleration in ad revenues, but it puts the company behind a few streaming rivals.

The competition: According to our forecast, Disney+, which is set to launch its ad-supported tier on December 8, will have slightly higher US revenues next year at $1.02 billion, growing to $1.19 billion in 2024. The Walt Disney Co. already had an ad infrastructure through Hulu and ESPN+, while Netflix had to build one from scratch.

Hulu will see $4.25 billion in US ad revenues in 2023, further evidence of the ad revenue opportunity for Netflix if the company can capitalize on it.

Netflix is still in flux: The platform needs to sell brands on advertising without detracting too much from its subscription revenues.

  • Netflix’s penetration, which will reach 50.7% of the US population in 2023, is much higher than Hulu’s 38.5%. That doesn’t necessarily mean more ad dollars, since almost all of Netflix’s subscribers are currently not seeing ads.
  • Almost half of frequent Netflix users are interested in an ad-supported tier, according to a May Morning Consult survey.
  • Netflix has set up infrastructure to capitalize on interested viewers. Ahead of the launch, it partnered with DoubleVerify, Integral Ad Science, and Microsoft to build out its data measurement and ad service capacity, and Nielsen’s Digital Ad Ratings will be available to Netflix’s advertisers next year.

Basic with confidence: Netflix knows advertiser interest is high, so the platform is trying to make advertising competitive on its service.

  • The platform is charging $65 for each 1,000 users reached, according to The Wall Street Journal, though our analyst Jeremy Goldman noted “companies often float higher figures yet end up agreeing to lower figures.”
  • It’s also limiting the number of ads a single advertiser can purchase, which will increase availability and allow more advertisers to dip their toes in Netflix’s pool from the jump.

What will work for advertisers? While ad effectiveness can’t yet be measured, there’s no reason to think an ad platform that is available to 50% of the US—and could attract more potential subscribers—will fail. Still, Netflix is threading the line between driving revenues and driving away viewers.

  • Ad breaks are 4 to 5 minutes per hour of content, with ads running 15 to 30 seconds.
  • That’s good news for viewers, who are more likely to consider ads unreasonable as they get longer, according to Hub Research.

Consumers think higher of the leading subscription service ad loads than of on-demand or live TV. And in some ways, streamers like Hulu and Peacock have already primed Netflix viewers for seeing ads in streaming.

The other side: Not everything about Netflix Basic With Ads is rosy. The new service doesn’t offer all TV shows and movies. And it doesn’t work well with Chromecast. On the other hand, kids’ profiles are ad-free, which will certainly appeal to cost-conscious but ad-averse parents.

This was originally featured in the eMarketer Daily newsletter. For more marketing insights, statistics, and trends, subscribe here.