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Netflix saw shares rise more than 9% on Thursday after revealing details of its new ad-supported layer that suggested the business model was starting to pay off.

The streaming service said this week it has five million monthly active users for its cheaper, ad-supported variant, and 25% of its new subscribers have signed up for the tier in areas where it’s available.

The update came at Netflix’s inaugural presentation for advertisers on Wednesday, the first time Netflix has attended the so-called Upfront presentation. This year, leading media companies including Comcast‘s NBCUniversal and Warner Bros. Discovery they emphasized ad-supported streaming in their presentations.

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Shares of Netflix rose on Thursday shortly after the company offered new details about its level of ad-supported streaming.

Netflix to launch its ad-based option in late 2022, after quarters of stagnant subscriber growth sent his shares tumbling.

Company posted mixed financial results in its most recent quarter, but said it added 1.75 million subscribers. Netflix is ​​also preparing for its wider rollout crackdown on password sharingthe next step to increase income.

Media companies that once focused on adding subscribers to their fledgling streaming services have now turned their attention to the profitability of the businesses. To achieve this, some have reduced the cost of content and relied on advertising models.

Last week, when Disney reported earnings, CEO Bob Iger noted that the company looked at the ad-supported option of its Disney+ streaming service. as another way help the streaming business achieve profitability. Disney+ lost four million subscribers during the quarter.

Netflix’s advertising layer which it costs $6.99 per month and features 15- or 30-second ads before and during content, marks a turnaround for the company’s leadership, which has long said it would not put ads on the platform.

Netflix has launched an advertising option in partnership with Microsoft. Its content will be rated by Nielsen later this year to help advertisers better understand its reach.

Soon after the launch, Netflix founder and former CEO Reed Hastings he admitted he was slowly making his way to advertising on the platform. When Netflix launched the ad tier in November, it was $1 cheaper than Disney+ and Hulu’s ad-supported options.

Netflix CEO Ted Sarandos said the company is likely to offer more subscription plans with ads in the future, highlighting the potential to add more subscribers.

— CNBC’s Alex Sherman contributed to this report.

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