Netflix is focusing further on advertising revenue growth, with an upgrade and rename of its ad supported service. During the Q1 2023 earnings call, CFO Adam Neumann revealed that ad-supported users in the US now generate more revenue than Standard ad-free users, prompting the company to enhance its ad-supported Basic with Ads membership. The service has been renamed to the Standard with Ads plan with the $6.99 price point unchanged. Like the ad-free Standard plan, the new tier offers two simultaneous streams in 1080p, matching the Standard ad-free plan’s offerings and bettering the current ad-free Basic plan’s single stream in 720p. The change makes the ad-tier more compelling for users and expands Netflix's available advertising inventory. Alongside this change, Netflix is cracking down on account sharing by introducing paid-sharing options for Standard and Premium users. For a price comparable to the ad-supported subscription (and more expensive in Spain), users can add an additional user who doesn’t live with them to their plan.

These changes are expected to drive more users to the ad-supported plan, resulting in increased ad revenue per account. Consequently, Ampere projects Netflix will earn $2.24bn in advertising revenue in the US and just under $4bn worldwide by 2027. Although overall subscription revenue per user may experience a slight dip as more users shift to the Basic with Ads tier, this will be counterbalanced by the more robust advertising revenue. Ultimately, these strategic decisions should lead to a significant overall boost for Netflix as it continues to innovate and adapt to evolving user preferences.