The uptake of Netflix’s ad tier in the UK continues to grow. According to Ampere Analysis, by the end of June 2024, ad-tier users accounted for 15% of Netflix’s UK user base, surpassing the 11% proportion of the streamer’s ad-tier users in the U.S.
In the UK, ad-tier sign-ups have been largely driven by consumers who subscribe to Netflix as a standalone service. In 2024, 50% of new ad-tier subscribers did not have any other SVoD (subscription video on-demand) services when they signed up. In contrast, ad-tier sign-ups in the U.S. are more likely to have multiple other subscription services. This indicates that the ad tier in the U.S. is more effective in attracting heavy SVoD users, who use the cheaper ad tier to stack multiple services. Conversely, in the UK, the ad tier has been particularly effective in capturing consumers who previously did not subscribe to any SVoD service, likely due to its lower price point.
This trend is supported by Ampere’s Consumer data, which showed that UK respondents who only subscribe to Netflix, and no other SVoD services (Netflix-only households), who agreed with the statement “I would be willing to see some/more adverts if it made the price of a video-on-demand service I already have, or am planning to subscribe to, cheaper,” skew towards lower income brackets.
The differing motivations for sign-up between U.S. and UK audiences also result in different attitudes toward subscriber loyalty. Among those who signed up to Netflix’s ad tier in 2023, UK subscribers exhibited a lower churn rate (14%) compared to the U.S. (20%) after 100 days, highlighting that users who subscribe to multiple services in the highly fragmented U.S. market are generally less loyal than those with just one or two SVoD services in the UK.
The cheaper ad tier has also allowed Netflix to capture a distinct consumer group in the UK. As the dominant service in both the U.S. and UK, Netflix was historically taken as a standalone service by a significant portion of the market. However, as new services launched and gained traction, stacking rates increased, and the proportion of Netflix-only households declined steadily in both regions. The introduction of the ad tier has reversed this trend in the UK, resulting in growth of Netflix-only households since Q3 2022, reaching 14% of UK respondents by Q1 2024.
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