Netflix increased its total revenue by 16% to $10.2bn in the last quarter of the year.
During its quarterly earnings call yesterday, the streaming giant also shared that it exceeded its Q4 ad revenue target, doubled ad revenue year-over-year, and now expects ‘to double it again’ in 2025.
According to a shareholder letter, Netflix wrapped up the year with 302 million subscribers — 19 million of which were added in Q4. The figures show that its ad-supported plans are becoming increasingly popular, too.
Ad plans accounted for over 55% of Q4 sign-ups across Netflix’s ads countries, Gregory Peters, co-CEO, president and director of Netflix, said in the Q4 earnings call. Subscriptions to the ad-supported plan increased ‘about 30% quarter-over-quarter’ in Q4 and, Peters noted, ‘that was on top of 35% the quarter before.’
Engagement on these plans was also strong, with view hours per member reportedly being similar to those on the ad-free plans. This, Peters said, is a ‘really good marker’ of their success.
‘We’ve done the work, I would say, to meet our scale goals for advertisers in 2025. And that means that increasingly, we’ve been able to shift more of our focus, more of our attention on making the offering better for advertisers to increase monetisation of that growing inventory,’ he said.
Good news for advertisers
Netflix exceeded its ad revenue target in the last quarter of 2024 and also doubled its ad revenue year-over-year.
‘We expect to double [ad revenue] again this year, so that should give you a sense of the slope of monetisation growth that we’re on,’ Peters said.
He added that the platform will ‘transition from crawl to walk’ in the new year. This will bring more opportunities for advertisers, since Netflix’s own ad stack is hailed as ‘a big part’ of this transition. The ad stack has already been successfully rolled out in Canada and will launch in Netflix’s remaining ads countries this year, with a US launch scheduled for April.
‘The biggest initial benefit we have of using our own ads server is just enabling us to offer more flexibility, more ways of buying for advertisers, fewer activation hurdles, just improving the overall buyer experience. And of course, that is meant to drive increased sales and the ease of transacting with Netflix,’ Peters said.
Looking ahead, Peters said that the first-party ad tech platform will ‘deliver more critical capabilities’, ‘more programmatic availability’ and ‘enhanced targeting’ as a result of more data, measurement, reporting and incrementality studies.
Other priorities for 2025 include further tapping into live programming and games. On gaming, Peters said: ‘There’s plenty more to do in this space, but we’re breaking into a whole new content category, which, by the way, drives approximately $140 billion in consumer spend ex China, ex Russia and not even including the ad revenue.’
Featured image: Venti Views / Unsplash
