Ad-Supported Streaming Sees Netflix Earnings Take Off

Bangkok, Thailand - April 25, 2022 : iPhone 13 showing its screen with Netflix application.

Despite attracting the ire of many at the time, Netflix’s cheapest ad-supported streaming plan is already attracting users with 70 per cent of new signups and two-fifths of all accounts globally choosing to view ads in return for a cheaper contract.

The company revealed the growth its Q4 2023 earnings released overnight. It also said that such was the success of the basic plan, that it was moving to retire the cheapest ad-free tier around the world, starting with Canada and the UK. It also promised advertisers to “e continue to improve the targeting and measurement” it offers.

However, it said that it was planning to resume price rises for customers. “. As we invest in and improve Netflix, we’ll occasionally ask our members to pay a little extra to reflect those improvements, which in turn helps drive the positive flywheel of additional investment to further improve and grow our service,” the company said in a letter to shareholders.

Netflix also said that it is looking to continue its move into advertising and gaming.

“It’s a $600B+ opportunity revenue market across pay TV, film, games and branded advertising — and today Netflix accounts for only roughly five per cent of that addressable market. And our share of TV viewing is still less than 10 per cent in every country”.

Based on the size of the opportunity, Netflix has said it expects “healthy double-digit revenue growth” largely thanks to its burgeoning ads business.

“We’ll also continue to invest in and build our ads business; we expect strong growth in 2024 but off a small base so it’s not yet a primary driver of our overall revenue growth. Our aim is to make ads a more substantial revenue stream that contributes to sustained, healthy revenue growth in 2025 and beyond,” the company added.

 

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