Netflix says ad tier has 5 million monthly active users: ‘The signals are promising’

Netflix’s (NFLX) ad-supported tier is beginning to show some signs of life — six months after its debut.

At the company’s virtual upfronts presentation on Wednesday, the streamer revealed its ad-based plan, dubbed “Basic with Ads,” has 5 million global monthly active users, or MUAs, a metric that Netflix Worldwide Advertising President Jeremi Gorman said “actually matter[s] to advertisers.”

The company has yet to reveal actual subscriber figures for the ad tier, or how much revenue it’s generated so far. MUAs can include multiple people using the same account.

“We would interpret that 5MM MAUs as implying 2-3MM subscription accounts,” Evercore ISI analyst Mark Mahaney wrote in a new note to clients on Thursday, adding management has reiterated its long-term goal of generating $3 billion or 10% of its revenue from advertising.

Mahaney estimated ad revenue likely won’t achieve 10% of total revenue until “perhaps 2025.”

“The more important question for us is how incremental the…

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