Netflix has been people’s go-to streamer for all their favorite shows and movies, which has prompted it to increase its offerings and make its platform more accessible than ever.
Recently, Netflix made multiple announcements to its customers, proving the company keeps its promises.
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At the beginning of the year, Netflix announced it would stop reporting subscription numbers in 2025 to focus on financial metrics that better inform and benefit investors.
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Although the streamer had been reporting a decrease in membership subscriptions in recent quarters before its initiative to stop password sharing, the decision to stop reporting subscription numbers is not because Netflix is trying to hide a weak spot in its business.
Rather, the company is doing well regarding subscriber numbers, as it recently announced its latest record-breaking membership achievement.
Netflix co-CEO Ted Sarandos makes an announcement.
Netflix implements ad-based tiers in its membership offerings
In November 2022, Netflix introduced a more affordable subscription option, implementing ad-supported tiers that allowed users to watch Netflix with a couple of commercial breaks in between to foster subscriber growth.
In its last reported earnings, Netflix announced it gained 5.1 million subscribers in the third quarter of 2024, totaling 282.7 million subscribers across all membership types.
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Two years after the launch of ad-supported tiers, these memberships have proven to be a total success. This month, they reached 70 million global monthly users, almost double the 40 million users reported in mid-May.
As the company stated on Tuesday, this number of users now accounts for over 50% of all new Netflix subscribers in countries where the ad-based tiers are available.
Netflix increases its revenue thanks to its successful ad-tier gambit
Netflix reported an increase in ad-tier membership by 35% quarter over quarter in its third-quarter earnings report for 2024. Due to this growth, the company said it would continue to build its advertising business and improve its offerings.
The flourishing of Netflix’s ad business was one of the key factors in its revenue growth for its last reported quarter, which increased by 15% year over year.
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Due to the lucrative nature of this fairly new business venture, Netflix launched its own in-house advertising technology in Canada but plans to roll it out globally by 2025.
“We’re pleased that we’ve reaccelerated our growth and, as we head into 2025, we expect to deliver solid revenue and profit growth by both improving our core series and film offering while investing in new growth initiatives like ads and gaming,” the company stated in its third-quarter earnings report.
NFL sells out ads in its first live Christmas Day games
With the National Football League (NFL) being the most lucrative sports league in the world and Netflix (NFLX) being the top streaming service based on subscribers, it’s a no-brainer that the two would join forces eventually.
In May this year, Netflix announced it had signed a deal with the NFL to livestream its Christmas Day games for the next three years.
According to Bloomberg, Netflix will pay around $150 million for two games this year or $75 million each, although neither the NFL nor Netflix have discussed the exact terms of the deal.
“There are no live annual events, sports or otherwise, that compare with the audiences NFL football attracts. We’re so excited that the NFL’s Christmas Day games will be only on Netflix,” said Netflix Chief Content Officer Bela Bajaria.
US Kansas City Chief’s American football players Patrick Mahomes (R) and Travis Kielce (L) arrive for the premiere of Netflix’s docuseries “Quarterback” at the Tudum Theatre in Los Angeles.
On Tuesday, only six months after announcing its partnership with the NFL and more than six weeks from the game’s broadcast, Netflix revealed it had sold out all available in-game advertising inventory for both live games that the streamer will air on its platform and had partnered with multiple new advertisers.
FanDuel (PDYPF) will be Netflix’s exclusive sports betting partner with a sponsored in-show feature. Verizon (VZ) will be the game’s kickoff sponsor, running a pre-kick segment before the game begins. All other partners will also have traditional ad commercials throughout the event.
According to AdAge, the average cost of a 30-second ad during a Sunday Night Football game is around $1 million in 2024.
If the average NFL game is three hours long and 25% of it is commercials, that equals 45 minutes to an hour of ads, or between 90 and 120 commercials, per game. This means NBC (which broadcasts Sunday Night Football) makes approximately $100 million per game on ads alone.
To accurately measure its live ratings during its upcoming NFL Christmas Day games, Netflix has partnered with Nielsen.
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