Netflix ‘on track’ to more than double ad revenue in 2025

Netflix says it’s “on track” to more than double ad revenue in 2025, as the streaming giant claims brands are “excited” about the growing scale of its advertising business.

Speaking on the publication of the firm’s third quarter results, co-CEO Gregory Peters explained that while the ads business still has a “small base” relative to the size of subscription revenue, Netflix now believes it has the “fundamentals” in place.

“We’ve proven we know how to scale. We see plenty of room for growth ahead,” he told investors yesterday (21 October).

Describing the business as “feeling good” about its growth trajectory, Peters claimed Netflix is notching up “even higher rates of growth” in programmatic, which the brand believes is going to drive incremental revenue going forward.

“What is driving those results? Advertisers are excited about our growing scale. We’ve got a highly attentive and engaged audience. The rollout of our ad tech stack means we’ve got more formats. We’ve got more measurement. We’ve got more ways to buy,” he added.

“And of course, our slate is a critical and important source of competitive differentiation.”

We thrive on competition. It pushes us to improve the service even faster for our members.

Ted Sarandos, Netflix

Peters claimed the platform has made “considerable progress” in building its capabilities in the ad space, including the rollout of its first-party ad tech stack Netflix Ads Suite in April. Current priorities include making it easier for brands to buy ads, iterating on ad formats and introducing ad interactivity.

For 2026, Netflix is promising “more ways to buy, more data for targeting and media planning capabilities globally”, as well as more modular interactive ad formats with enhanced AI capabilities and better measurement functionality.

“We want to increase the diversity of advertisers we have,” he said. “That’s a key direction of growth for us that enables that revenue growth.”

The company’s total third quarter revenue grew 17% to $11.5bn (£8.6bn). The streamer hit its highest quarterly view share ever in the UK (up 22%) and US (up 15%) since Q4 2022, according to data from Nielsen and Barb. The business claims that given the “still substantial amount” of linear viewing globally there is “plenty of opportunity” to expand Netflix’s share of TV engagement if the service continues to improve

Spend on sales and marketing rose 22% in the three months to 30 September to $786.3m (£588m). Investment in marketing and sales increased 13% to $2.2bn (£1.6bn) in the nine months to 30 September.

Netflix is now predicting a revenue uptick of 17% for the fourth quarter, driven by growth in members, pricing and ad revenue. The platform increased UK prices in February, after raising charges in the US, Canada, Argentina and Portugal in January.

The UK price for a standard subscription without adverts rose £2 to £12.99 a month. The price of the standard subscription with ads rose £1 to £5.99 a month, while the premium subscription increased by £1 to a monthly fee of £18.99. At the time, Netflix said the price rises would help the business “invest in programming and deliver more value” for members.

Speaking yesterday, Peters explained the company is committed to a range of plans at different price points.

“We think that yields a better member satisfaction, that yields better engagement and retention, and a better long-term business,” he stated.

‘Continuous improvement’

From a content perspective, the co-CEO called out the success of gaming and live events, notably September’s fight between boxers Terence Crawford and Canelo Álvarez. Hitting 41 million viewers, the fight was the most viewed men’s championship boxing match this century.

The Crawford versus Canelo clash was number one on Netflix in 30 countries and made the top 10 in 91 countries. Across Netflix’s social channels, the fight generated over 950 million owned impressions, while Canelo/Crawford was a top trending topic on X worldwide.

Another standout for Netflix was the success of KPop Demon Hunters, the platform’s most popular film ever at 325 million views.

“Progress in these areas is indicative of how we think we can best compete and grow the business over the long term. We focus on a few key areas that we think matter the most and then we work hard to deliver continuous improvement in those areas,” Peters stated.

“It sounds super simple, but building a real at-scale global streaming business is hard because you got to combine great tech product and great content from all around the world, and we believe we can continue to improve in both of those areas.”

The platform is also investing in audio via a tie-up with Spotify announced earlier this month. As part of the deal, Netflix will add sports, culture, lifestyle and true crime video podcasts from Spotify Studios and The Ringer to its programming from early 2026, starting in the US.

When asked how aggressively the business plans to build out the podcast category, Peters explained the tie-up is aimed at offering more “entertainment options” for members.

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“We’re going to build into this category like we do with our other categories based on demand signals that we get from our members. And we see this as really the opportunity to integrate high-quality video broadcast that broadens the Netflix offering,” he said.

Fellow co-CEO Ted Sarandos claimed the business has a “massive opportunity” to grow, given the streamer sits at around “7% of the addressable market” in terms of consumer spending and “10% of time spent on TV” in its biggest market.

Sarandos described it as an “exciting time” given the scale of innovation and competitive landscape.

“We thrive on competition. It pushes us to improve the service even faster for our members. Back at the beginning in the early DVD days even, and now in streaming and global streaming of original content, we could be with the biggest players in the world, tech and media. And as you see, we keep growing engagement, revenue and profit,” he stated.

Sarandos also squashed speculation Netflix is currently in the mix to buy Warner Bros Discovery, owner of networks including HBO, CNN and the Discovery Channel.

“We’ve been very clear in the past that we have no interest in owning legacy media networks, so there’s no change there. But in general, we believe that we can be and we will be choosy. We have a great business,” he stated.

“We’re predominantly focused on growing organically, investing aggressively and responsibly into the growth.”