Netflix aims to make ads a more substantial revenue stream that contributes to sustained, healthy revenue growth in 2025 and beyond.
Netflix sales surged to 12.5% to £7bn in its last quarter, as it vowed to build its ads business into a “more substantial revenue stream” in the year ahead. Netflix said that it expected “strong growth” in its advertising business in 2024, although it acknowledged this was off a small base and it was not yet a “primary driver” of its sales growth. “Our aim is to make ads a more substantial revenue stream that contributes to sustained, healthy revenue growth in 2025 and beyond,” it said.
Netflix co-ceo president and director Gregory Peters said, “We largely put price increases on hold while we were rolling out the paid sharing work because we saw that as a form of substitute price increases. We’ve got binge ad sponsorships now. And we have to build increasingly the capability to be better partners with advertisers and serve their needs.”
The streaming giant added over 13 million subscribers in the three months to the end of December, amid a crackdown on people sharing subscriptions. Growth levels superseded growth in any quarter since 2020, at the peak of the pandemic. Netflix’s recent growth in subscribers comes as Amazon Prime has come under fire for changing its model whereby subscribers will have to pay extra to continue having an ad-free service. In contrast, Netflix and Disney instead offered cheaper ad-supported options, however Netflix removed its cheapest ad-free offering earlier this year, meaning viewers had to pay an additional £4 to access the standard ad-free offering.
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