Last updated Feb 9, 2026 by AI Enrichment
On November 3, 2022, Netflix launched its ad-supported subscription tier called 'Basic with Ads' in 12 countries including the United States, United Kingdom, Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, and Spain. Priced lower than its ad-free plans, the tier offered subscribers access to Netflix's content library with advertising breaks, marking a fundamental shift in the company's business model. Netflix partnered with Microsoft as its exclusive global advertising technology and sales partner, with Microsoft providing the ad-serving technology and handling ad sales operations. This launch represented a watershed moment for the streaming and advertising industries, as Netflix had long resisted advertising and positioned itself as a premium, ad-free service. The decision came after Netflix reported subscriber losses in early 2022, prompting the company to explore new revenue streams. The entry of Netflix into ad-supported streaming added significant premium video inventory to the connected TV (CTV) advertising market, creating a new major player that would compete with established ad-supported streaming services like Hulu, Peacock, and Paramount+. The launch also validated the hybrid subscription model combining ad-supported and ad-free tiers that had become increasingly common across streaming platforms.
Netflix's entry into advertising fundamentally reshaped the CTV advertising landscape by adding one of the world's most popular streaming platforms to the ad-supported ecosystem. With over 220 million global subscribers at the time, even a fraction converting to the ad tier represented massive new premium inventory for advertisers seeking to reach cord-cutters and streaming audiences. The partnership with Microsoft was particularly significant, as it elevated Microsoft's position in the ad tech stack and created a major alternative to Google and Amazon's dominance in streaming ad technology. The launch intensified competition among streaming platforms for advertising dollars, putting pressure on established ad-supported services to differentiate their offerings. It also accelerated the broader industry trend of streaming services adopting ad-supported tiers as essential revenue drivers, with Disney+ launching its own ad tier shortly after. For advertisers, Netflix's entry provided access to highly engaged audiences watching premium content, though initial limitations on targeting capabilities and measurement reflected the platform's nascent advertising infrastructure. The move also signaled that subscription fatigue and market saturation were pushing even the most resistant premium services toward advertising-based models.