Netflix plans to revolutionize streaming with generative AI ads in 2026

In the United States, Netflix is preparing to enhance its ad-based subscription model by introducing generative AI advertisements by 2026. This move comes as the company seeks to amplify its advertising revenue, especially after having launched its ad-supported subscription tier in November 2022. Since then, Netflix has gained substantial traction, with 94 million subscribers on this tier. This number represents a notable increase, as consumer preferences appear to shift towards more affordable viewing options. Insights shared by Amy Reinhard, Netflix's president of advertising, highlight that ad-tier subscribers are engaging significantly with both advertisements and content, spending an average of 41 hours monthly on the platform. The development of generative AI ads is part of a broader strategy where Netflix aims to adapt to the evolving landscape of viewer behavior and preferences. During its second annual upfront presentation aimed at advertisers in May 2025, Netflix revealed this new advertising format alongside interactive mid-roll and pause ads. This strategic move indicates the company's commitment to refining its advertising approach, making it more interactive and engaging for viewers. The new ad formats will follow the onboarding of Netflix's in-house advertising platform, which was launched in the U.S. in April 2025 after a successful debut in Canada earlier. Netflix's advertising ambitions don't stop at the U.S. market; the company plans to expand its advertising platform globally by June 2025. As Netflix positions itself among its streaming competitors who are also exploring innovative advertising strategies, it acknowledges that its ad business is in the early stages. There is a clear expectation that Netflix intends to double its advertising revenue by 2025, leveraging its growing subscriber base. The introduction of generative AI into their advertising medium may also reflect a trend where streaming platforms are increasingly relying on technology to enhance viewer experience and engagement. This forthcoming shift aligns with a broader industry trend toward integrating more sophisticated advertising techniques, similar to initiatives being launched by rivals such as Amazon in its Prime Video service. Overall, as Netflix prepares for these new advertising changes, it aims to redefine the approach to in-stream advertising while potentially reshaping viewer perception and interaction with ads on streaming platforms.