Streaming giant Netflix has set an ambitious target to double its advertising revenue in 2025, signaling strong confidence in the growth potential of its ad-supported subscription tier. This projection comes on the heels of a successful first quarter in 2025, where the company reported a 12.5% year-over-year increase in revenue to $10.54 billion, exceeding its own forecasts.
The ad-supported tier, launched in late 2022, has become a significant driver of new subscriber growth for Netflix. The company revealed that in the fourth quarter of 2024, over 55% of new sign-ups in markets where the ad-supported plan is available opted for this lower-priced option. This popularity underscores the appeal of a more affordable entry point to Netflix’s extensive content library.
During its Q1 2025 earnings call, Netflix executives expressed excitement about the momentum in their advertising business. They highlighted that ad revenue doubled year-over-year in 2024 and anticipate a similar doubling in 2025. While specific figures for advertising revenue are not broken out, analysts estimate Netflix’s current annual ad revenue run rate to be in the range of $1.5 billion to $2 billion. The target for 2025 therefore suggests an ambition to reach $3 billion to $4 billion in advertising revenue.
A key factor underpinning this optimistic outlook is Netflix’s significant investment in its advertising infrastructure. The company successfully launched its in-house, first-party ad tech platform, the “Netflix Ads Suite,” in the United States on April 1st, 2025, with plans for a global rollout across all its ad-supported markets in the coming months.
Netflix believes its proprietary ad tech platform is foundational to its long-term advertising strategy. Over time, this platform is expected to enable better measurement, enhanced targeting capabilities based on viewing habits and content context, innovative ad formats, and expanded programmatic buying options for advertisers. In Q1 2025, Netflix launched programmatic capabilities in Europe, the Middle East, and Africa (EMEA), adding to its existing programmatic offerings in the U.S. and Canada (UCAN) and Latin America (LATAM). A full launch in the Asia-Pacific (APAC) region is slated for the second quarter of 2025.
Netflix is also strategically leveraging live programming to attract real-time viewers and advertisers. The debut of WWE Raw in Q1 2025 has consistently ranked in the global Top 10, demonstrating the engagement potential of live content. Furthermore, the company is scheduled to stream a landmark women’s boxing rematch, Taylor vs. Serrano 3, in July 2025 and will broadcast two NFL games on Christmas Day 2025, doubling its NFL presence from the previous year. The Christmas Day NFL game in 2024 is estimated to have generated $25-35 million in advertising revenue in a single day, suggesting a significant revenue opportunity with two games in 2025.
Netflix emphasizes that live events drive “outsized positives around conversation and acquisition” of new subscribers, including those on the ad-supported tier. The high engagement metrics of the platform, representing approximately 10% of TV viewing hours in its most mature markets, provide advertisers with significant opportunities to reach attentive audiences.
This focus on growing the advertising business is part of Netflix’s broader strategy to achieve a $1 trillion market capitalization by 2030. The company’s growth pillars include expanding its content library, developing live programming options, enhancing its gaming division, and aggressively building its advertising revenue.
While advertising revenue is still relatively small compared to subscription revenue, the projected doubling in 2025 signifies its increasing importance to Netflix’s overall financial performance and its ambitious long-term goals.
Summary:
- Netflix aims to double its advertising revenue in 2025, building on the strong performance of its ad-supported tier, which now accounts for over half of new sign-ups in available markets.
- The company is heavily investing in its advertising technology platform, the Netflix Ads Suite, with a global rollout underway to enhance targeting and measurement for advertisers.
- Strategic forays into live programming, including WWE Raw and NFL games, are expected to attract more advertisers and drive subscriber growth in the ad-supported tier.
- This aggressive growth in advertising revenue is a key component of Netflix’s broader strategy to reach a $1 trillion market capitalization by 2030.