Netflix Inc. estimated that an advertising-supported version of its streaming service would reach about 40 million viewers globally by the third quarter of 2023, according to a document reviewed by The Wall Street Journal that Netflix shared with ad buyers.
Executives from Netflix and its advertising partner, Microsoft Corp. have met with ad buyers in recent weeks, seeking to lock in deals ahead of a planned launch later this year.
In preliminary projections, Netflix told ad executives it expects to have 4.4 million unique viewers worldwide at the end of the year, with 1.1 million coming from the U.S. The company estimated that would grow to over 40 million unique viewers by the third quarter of 2023, with 13.3 million from the U.S.
Netflix’s projections for advertisers covered a dozen launch markets, including Brazil, Mexico, Japan, the U.K., France, Germany, Korea, Spain, Italy, Australia and Canada.
The metric the company has shared, “projected unique viewers,” is expected to be higher than the number of subscribers for the advertising-supported Netflix plan, since more than one person in a subscribing household will likely be able to watch the service.
The streaming company continues to evaluate the potential demand for the ad-supported plan, and its forecasts for subscriptions and viewers could change over time, according to people familiar with the matter.
Netflix, with 220 million subscribers, is betting that a lower-cost, ad-supported plan could bring in new users and boost revenue, as the company confronts stepped-up competition and a maturing U.S. market.
The streaming giant lost nearly one million subscribers in the June quarter. It is joining rivals such as HBO Max and Disney+ that have or are planning to launch ad-supported services.
Netflix’s foray into advertising is a major reversal for a company that long said it would remain ad-free.
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