Since announcing that the streaming service had lost 200,000 subscribers during the first three months of the year, Netflix has subtly adjusted its goals from uninhibited subscriber growth at all costs to incrementally increased revenue per customer.

The first hint of this slightly different philosophy came during the company’s April earnings call in which the executive team reported that they would be expanding efforts to curtail password sharing. However, instead of attempting to turn the estimated 100 million worldwide households that use the service without paying into traditional subscribers, they hope to make them “sub-accounts” on existing subscriber plans, thus increasing the revenue from that account while making those most of viewers who are already interested in the service.

If successful, that move should provide a significant revenue bump for the world’s largest streamer, but it will likely pale in comparison to the added income from their soon-to-launch ad-supported tier. According to a new report from The Information, by introducing an ad-supported option for budget-conscious customers, the streaming giant could generate an additional 21% in annual revenue.

By pulling information from streaming competitors that also operate both ad-free and ad-supported tiers, The Information estimates that Netflix could add north of $703 million thanks to advertising alone, not including the additional subscriber fees. The basic monthly plan on the service is currently $9.99 per month with a $15.49 standard option and $19.99 premium plan also available.

Related: How Will Netflix Incorporate Advertising into Lower-Cost Tiers?

Of course, the number of commercials that Netflix chooses to run per hour will influence how much ad revenue they will generate. At last week’s upfront presentaton, Disney+ revealed that they plan to average four minutes of advertising per hour on their ad-supported tier debuting later this year. At the Warner Bros. Discovery presentation, the company announced that ads on HBO Max were currently averaging between two and three minutes per hour.

Both streaming services also limit what content is ad-supported — Disney+ won’t put ads on kids’ content and HBO Max doesn’t throw commercials in or around HBO programming — so how Netflix chooses to handle some of these questions will certainly impact their bottom line.

But, in the first quarter of the year, Netflix generated $7.868 billion globally and is forecasting an $8.053 billion haul in Q2, despite anticipating a 2 million subscriber decline. Amongst U.S. and Canada’s 74.58 million subscribers, Netflix averages $14.91 per account per month; so if curbing password sharing and introducing ad-supported viewing options can offset domestic subscriber losses that will almost certainly be considered a win for the service’s executives and shareholders.

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Netflix is a leading subscription-based video streaming service that offers on-demand access to an extensive library of over 3,000 movies, 2,000+ TV shows, and a growing collection of acclaimed Netflix originals. Renowned for producing groundbreaking content, Netflix has become a cultural powerhouse with hit originals like “Stranger Things,” “Wednesday,” “Squid Game,” “The Crown,” “Tiger King,” “Bridgerton,” “The Witcher,” and “Black Mirror.”

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The platform constantly updates its catalog, introducing fresh content alongside timeless classics and international hits. Netflix’s commitment to storytelling has also earned critical acclaim, with award-winning exclusives such as “Roma,” “Marriage Story,” “The Power of the Dog,” “Mank,” and “Ma Rainey’s Black Bottom.” In 2023, their animated film “Guillermo del Toro’s Pinocchio” won an Academy Award for Best Animated Feature, further solidifying Netflix’s reputation for high-quality content.

Recently, Netflix has expanded beyond standard movies and TV titles with the addition of video podcasts, and is also exploring a digital store that would offer third-party streamers within the app.

Netflix offers three plans – stream on 2 devices in HD with the “Standard with Ads” ($8.99) plan, on 2 devices in HD with the “Standard” ($19.99) plan, and 4 devices in up to 4K on the “Premium” ($26.99) plan.

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