Netflix continues to dominate the streaming industry, with impressive subscriber growth and strong financial results. Despite fierce competition, its strategy of expanding ad-supported plans and live events, like sports and concerts, is driving future revenue. With more room for growth globally, Netflix’s influence is expected to keep expanding.
Author: Bruce Gil
Almost 20 years after Netflix (NFLX) debuted its video streaming platform in 2007, the company has been able to maintain — as one Wall Street analyst put it — its “insurmountable lead in the streaming wars.” And that lead is only getting wider.
Despite facing more competition than ever, Netflix recently reported its biggest growth in subscribers. The streaming giant said its paid memberships rose by 19 million in the fourth quarter of 2024, bringing its total memberships to almost 302 million, globally. Additionally, its yearly revenue grew 16% to $39 billion last year. The news left investors happy, resulting in Netflix stock reaching an all-time high this month.
And the media giant believes it still has a lot of room to grow.
William Blair analyst Ralph Schackart pointed out in a recent note that Netflix makes up less than 10% of television viewing in all the countries it operates in, leaving the company with “a long runway for growth going forward as streaming continues to permeate globally.”
Netflix co-CEO Ted Sarandos made a similar point during a recent call with investors when he said that the company’s average user streams Netflix for about 2 hours a day. He added, the company has “plenty of work to do to grow” that figure. Netflix not only wants more viewers, it also wants its current members to watch more, which will help the company’s still budding ad business grow.
Ironically, as traditional media companies — like Warner Bros. Discover, Paramount (PARA), and Disney (DIS) — prioritize growing their streaming business, Netflix sees commercials and live events, business models typically associated with cable TV, as the the key to its future growth.
Wedbush Securities analyst Alicia Reese wrote in a note this month that while the company’s subscriber growth was its primary revenue driver in 2024, its ad-tier is expected to start driving revenue up in 2026. Netflix has already said that half of its new memberships are coming from its ad-supported plan — in the regions where the plan is available.
Reese wrote that Netflix is positioned to boost its ad-tier revenue over the coming years via more live events.
The company has had massive success in this arena this year, with major events like the “Jake Paul vs. Mike Tyson” fight, which became Netflix’s “most-streamed sporting event ever. On Christmas Day the company hosted the most-streamed NFL games in history, with Beyoncé’s “Beyoncé Bowl” helping drive 50 million viewers.
Its slate of upcoming events looks just as promising.
“Netflix is also leaning into event-driven programming in 2025, with a full year of WWE Raw and what will likely be a number of unannounced unique events in the sports and comedy genres,” wrote Raymond James (RJF) analyst Andrew Marok in a note last week.
Credits: TCA, LLC.