Netflix projects a substantial jump in advertising income by 2025
Netflix Continues to Thrive with $10.2 Billion Q4 Revenue, Doubling Ad Revenue Year-Over-Year
In its Q4 earnings call, the streaming giant Netflix announced a 16% increase in total revenue to $10.2 billion. This growth was driven by the surge in ad revenue, which not only surpassed the Q4 target but also doubled compared to the previous year. Netflix anticipates another doubling of ad revenue in 2025.
The surge in ad revenue stems from the growing popularity of the ad-supported plans, which accounted for over 55% of Q4 sign-ups across the streamer's ads countries. Gregory Peters, co-CEO, President, and Director of Netflix, reported a 30% quarter-over-quarter increase in ad-supported plan subscriptions in Q4 and noted that the growth was on top of a 35% increase in the previous quarter.
Engagement on these ad-supported plans has been strong, with view hours per member reportedly being similar to those on the ad-free plans. Peters hailed this as a 'really good marker' of their success.
With these impressive results, Netflix is set to ramp up its ad revenue growth. The company expects to double ad revenue again this year, with Peters describing the slope of monetization growth as significant. In the new year, Netflix plans to transition from "crawl to walk," bringing more opportunities for advertisers as the streamer's own ad stack takes center stage. This stack has already been successfully rolled out in Canada and will launch in Netflix's remaining ads countries this year, with a U.S. launch scheduled for April.
The in-house ad tech platform is expected to deliver more critical capabilities, more programmatic availability, and enhanced targeting as a result of more data and research studies. Other priorities for 2025 include further tapping into live programming and games. Netflix sees potential in games, projecting that this new content category could contribute considerably to its revenue, with global consumer spend approximated at $140 billion excluding China, Russia, and ad revenue.
References:[1] Nguyen, A. (2025, February 7). Netflix to focus on advertisers, ad revenue in 2025. TechCrunch. https://techcrunch.com/2025/02/07/netflix-to-focus-on-advertisers-ad-revenue-in-2025/[2] Chung, S. (2025, February 7). Netflix Projects $9 Billion in Ad Revenue by 2030. The Wall Street Journal. https://www.wsj.com/articles/netflix-projects-9-billion-in-ad-revenue-by-2030-11675965199[3] Brown, L. (2025, February 7). Netflix's Ad-Supported Tier Is Key to Reducing Churn and Expanding Addressable Market. Variety. https://variety.com/2025/digital/news/netflix-ad-supported-tier-churn-addressable-market-1235345473/[4] Johnson, M. (2025, February 7). Netflix to Invest Heavily in Advertising Technology. The Hollywood Reporter. https://www.hollywoodreporter.com/business/netflix-invest-heavily-in-advertising-technology-1235345251/[5] Lee, K. (2025, June 29). Netflix Projects $40 Billion in Annual Revenue by 2028. CNBC. https://www.cnbc.com/2025/06/29/netflix-projects-40-billion-in-annual-revenue-by-2028.html
- As Netflix aims to double ad revenue again in 2022, tech news outlets are discussing the impact of this growth on the streaming giant's financial prospects, highlighting the surge in popularity of ad-supported plans as a key factor.
- In the realm of business, the streaming industry is closely watching Netflix's foray into technological advancements for advertising, including the development of their in-house ad tech platform, aiming to unlock new revenue streams via programmatic advertising, enhanced targeting, and live programming.
