Netflix ad tier has nearly 5 million monthly active users

Netflix’s recently launched ad-tier plan reached five million monthly active users as users prefer paying $7 than $10

Netflix Inc's recently launched ad-supported tier reaches nearly 5 million active users per month, executives said on Wednesday in a pitch that emphasized the breadth of its programming to potential advertisers.

The streaming video pioneer launched a $7-per-month option with commercials last November in 12 markets, including the US, as an alternative to ad-free plans that start at $10 a month. It was designed to attract more customers and add a new revenue stream as competition for online viewers intensified.

On Wednesday, Netflix made its first presentation to advertisers at the annual ritual known as the upfronts, where networks aim to lock in ad commitments for upcoming shows. Walt Disney Co, Comcast Corp and other companies also are vying for digital ad dollars.

Netflix executives stressed the company's wide range of programming, from sci-fi hit "Stranger Things" to Korean drama "Squid Game" and upcoming action movie sequel "Extraction 2."

"No other entertainment company aspires to create great movies and shows across so many genres in so many countries, and for such a broad, diverse audience," said Bela Bajaria, chief content officer for Netflix.

Jeremi Gorman, Netflix's president of worldwide advertising, said that global monthly active users had reached 5 million. Monthly active users count all adult profiles used on one account with ads. Children's profiles do not run commercials.

Netflix reported 232.5 million paying subscribers around the world as of the end of March.

Executives said they wanted to work with advertisers to create new types of advertising that could only be done on a digital service. For instance, a 30-minute commercial could play out over several days, with a story unfolding each time a viewer watches a show on Netflix, co-Chief Executive Ted Sarandos said.

"You can't do that in linear TV because people don't live on one channel," Sarandos said.

Netflix had planned to make the ad presentation live in New York but switched to a virtual event to avoid protests from striking members of the Writers Guild of America