Netflix will show generative AI ads midway through streams in 2026

[Karlston]

Netflix is trying to grow ad revenue quickly.

Credit: Netflix

 

Netflix is joining its streaming rivals in testing the amount and types of advertisements its subscribers are willing to endure for lower prices.

 

Today, at its second annual upfront to advertisers, the streaming leader announced that it has created interactive mid-roll ads and pause ads that incorporate generative AI. Subscribers can expect to start seeing the new types of ads in 2026, Media Play News reported.

 

“[Netflix] members pay as much attention to midroll ads as they do to the shows and movies themselves,” Amy Reinhard, president of advertising at Netflix, said, per the publication.

 

Netflix started testing pause ads in July 2024, per The Verge.

 

Netflix launched its ad subscription tier in November 2022. Today, it said that the tier has 94 million subscribers, compared to the 300 million total subscribers it claimed in January. The current number of ad subscribers represents a 34 percent increase from November. Half of new Netflix subscribers opt for the $8 per month option rather than ad-free subscriptions, which start at $18 per month, the company says.

 

Speaking to advertisers, Reinhard claimed that ad subscribers spend 41 hours per month on Netflix on average.

 

The new ad formats follow Netflix's launch of its own in-house advertising platform in the US in April. It had previously debuted the platform in Canada and plans to expand it globally by June, per The Verge.

 

Netflix regards its advertising business as in its early stages, meaning customers can expect the firm's ad efforts to continue expanding at a faster rate over the coming years. The company plans on doubling its advertising revenue in 2025.

 

“The foundations of our ads business are in place, and going forward, the pace of progress will be even faster,” Reinhard said today.

 

Netflix subscribers join virtually all mainstream streaming customers in growing ad efforts. This week, Amazon announced contextual pause ads and shoppable ads for Prime Video this year. Web-based TV viewers are also seeing new-age advertising efforts, such as LG TVs’ webOS software, to integrate ads that are said to analyze viewer emotions.

 

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