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Why Netflix's ad plan is set to be a key growth engine for the streamer this year

1. Netflix gained a record new subscribers in Q4 2024, fueled by ads. 2. The ad tier reached 70 million global users, comprising 55% of new sign-ups. 3. Ad revenue doubled in 2024, with expectations to double again in 2025. 4. Netflix's churn rate remains low, supporting subscriber retention with its ad plan. 5. Ad-supported tier may lead to upgrades to higher-priced subscriptions.

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FAQ

Why Bullish?

The strong subscriber growth and ad revenue indicate healthy demand. Similar past trends show stock appreciation after positive earnings announcements.

How important is it?

The growth in subscribers and ad revenues is critical to Netflix's strategy. Historical performance shows a direct correlation between subscriber growth and stock price.

Why Long Term?

Continued growth in ad revenue and subscriptions suggests sustained performance. Past subscription service expansions have led to long-term stock gains.

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