As Netflix nears the three-year anniversary of its Standard With Ads tier, the data paints a compelling picture of its success in the streaming marketplace. Once cautiously viewed as a supplementary option, the ad-supported tier has now emerged as a central pillar of Netflix’s subscription strategy. Hub Entertainment Research’s Q2 2025 TV Churn Tracker confirms this trajectory, reporting that 42% of Netflix subscribers now opt for the Standard With Ads plan—a threefold increase from just two years ago.
This rapid growth aligns with broader industry observations. In 2024, the number of new Netflix subscribers choosing the ad-supported model doubled compared to 2022, reinforcing that the shift is neither incidental nor short-lived. What began as a calculated move to expand Netflix’s subscriber base has become a commercially validated strategy, attracting both new users and keeping churn low.
Initial market skepticism has been overtaken by strong performance indicators. Hub’s early 2023 assessments struck a cautiously optimistic tone, noting that while the ad-supported plan could attract new customers, the potential loss in revenue from existing users “trading down” to a lower-priced tier posed a risk. However, Netflix’s early reports that uptake was modest suggested this concern may have been overstated. By mid-2023, the tone had already shifted. As Hub stated at the time, “Even if Disney+ and Netflix didn’t launch home runs with their ad tiers, they’ve been solid hits.”
Now, two years later, there is no ambiguity. As Hub’s report concludes: “Standard With Ads has been a victory for Netflix.”
The profile of Netflix’s ad-supported user base further reinforces its strategic value. Demographically, the Standard With Ads tier skews older, with two-thirds of subscribers aged 35 and above. This aging trend has accelerated over the past year and contrasts with the platform’s traditionally younger demographic. From an economic perspective, the audience also tends to be less affluent. While 39% of Netflix’s ad-free subscribers report household incomes over $100,000, only 28% of Standard With Ads users fall into that bracket.
Moreover, these subscribers are increasingly comprised of cord-cutters and cord-nevers. As of May 2025, 34% of Standard With Ads users do not subscribe to a traditional or virtual multichannel video programming distributor (MVPD or vMVPD), compared to 28% in May 2023. This indicates a growing trend among value-seeking viewers to use ad-supported streaming as a substitute for more expensive pay-TV bundles.
The financial implications of this shift are substantial. By offering a lower entry point for price-sensitive customers and monetizing viewership through advertising, Netflix has created a tier that captures incremental revenue without cannibalizing its core subscription base. The strategy also positions Netflix as an increasingly attractive partner for advertisers, providing reach into a mature, cost-conscious audience with growing engagement.
The success of Standard With Ads also sets a precedent for the broader SVOD market. As streaming platforms search for ways to manage churn, expand audience segments, and diversify revenue streams, Netflix’s model stands as a template for balancing growth and profitability. The transformation of a once-experimental offering into a mainstream driver of audience expansion and advertising inventory exemplifies the evolving economics of streaming video.
With the third anniversary of Standard With Ads on the horizon, Netflix has firmly secured its position not only as a dominant SVOD provider, but also as a leader in the ad-supported streaming space.
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