Small Screen: Netflix Basic With Ads

Key Takeaways:

• Despite initial growing pains, Netflix “Basic-with-Ads” is starting to find its footing, which bodes well for attracting advertisers across various industries

  • Pathmatics by ST data indicates that the top five categories of advertisers by spend on Netflix in the US in 1Q23 were (in order): Consumer Packaged Goods (CPG), Financial Services, Travel & Tourism, Food & Drink Services, and Software

  • Microsoft, Turbo Tax, Hilton Worldwide, Unilever, and e.l.f Cosmetics were the top individual advertisers spending on Netflix as of 1Q23

• FAST (free ad-supported streaming television) is picking up the pace: Per ST estimates, MAUs of the FAST mobile app cohort* are up a collective 22% YoY as of 1Q23, led by strong growth in FAST services such as ITVX (+50% YoY) and Plex (+41% YoY)

• Paramount+, HBO Max, and Netflix all saw an acceleration in WoW growth for the week of Feb 20 with DAUs increasing 6%, 4%, and 4%, respectively (per ST), on the back of ongoing live sports and tentpole content

  • Paramount+ benefitted from ongoing Champions League games as well as NCAA Men’s basketball games, while HBO Max was propelled by The Last of Us. Netflix’s positive WoW growth was likely motivated by the popularity of its tentpole series Outer Banks along with the recent headline catching docuseries Murdaugh Murders

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