Netflix Tells Advertisers Sign-Ups to Ad Tier Doubled in January

Netflix is making progress in its plunge into advertising—slowly.

The streaming firm told advertisers in the past 10 days that new sign-ups for the tier with ads had doubled in January over December, a sign that low-cost offering was catching on with subscribers, ad executives say. Netflix didn’t tell advertisers how many sign-ups that amounted to. But last fall, when it was first pitching the ad offering to marketers, it told advertisers it expected the tier would draw just 1.75 million subscribers by the end of the first quarter, the equivalent of just 2.4% of Netflix’s North American subscriber base at the end of December, according to people briefed on Netflix's projections.

That number signaled how low Netflix’s expectations were early on. Roughly half of the 42.8 million people who subscribe for Hulu’s main streaming service take the tier that carries ads, Netflix Chief Financial Officer Spencer Neumann told analysts last month on the quarterly earnings call, a number he said was a rough estimate.