(Credit: Netflix)

Netflix has joined the bandwagon of its fellow streaming platforms by introducing advertising services in the viewing experience. Not just that, they will be going all in and using artificial intelligence to personalise these ads. 

At its recent annual event, the platform announced that these new formats with AI-generated ads and pause ads will be hitting the screens in 2026. This will be an exclusive feature for users on the $7.99 plan that includes ads. A major portion of Netflix’s subscriber base comes under this plan. The company has also shared that the only step remaining in the process is to combine generative AI, which will not only reimagine the appearance of these ads but also the manner of consumption.

Netflix’s plan which includes ads was introduced in 2022 and has since seen a rise in popularity. With 40 million subscribers in 2023, the number reached 70 million by the end of 2024. Currently there are 94 million people who use this plan showing a 34% increase in just six months.

This ad-supported plan is the pull factor for half of the new subscribers. As of the end of last year, this made up for most of their 301 million global subscribers. Interestingly, Amy Reinhard, the President of Advertising at Netflix, shared that most of these subscribers are from younger demographics.

The addition of AI is a deliberate choice. This will not simply interrupt the viewing experience, instead, it will adapt to it by understanding the behaviour of the viewer. It will adjust the tone, timing and messaging of the ad. Personalising the experience, the viewer may expect product placements and messages for products that they may have searched up earlier.

According to Netflix’s data, the subscribers of the ad-supported plan indulge in an average of 41 hours of viewing per month. In an attempt to attract advertisers, they proclaimed that their users are already more engaged than those of other platforms, and this will just improve with time.

As said at the beginning, Netflix is not the first to take this step. Amazon Prime Video has already introduced a feature that includes ads which are context-based and shoppable. YouTube uses Gemini AI to understand the emotionally intense moments in their videos and introduces an ad right after.