Among an industry-diverse group of winning platforms, Netflix will emerge with the fastest digital ad revenue growth this year, according to a study by Emarketer. Netflix’s ad-supported video-on-demand experiment got off to a bumpy start in late 2022 and early 2023, but by 2024, the US leader in subscription OTT (sub OTT) viewership had righted the ship. With its ad tier proving to be incredibly popular and its ad tech improving, Emarketer forecasts 43.0% growth for 2025, reaching $2.07 billion. That will leave Netflix well outside the top 10 in total digital ad revenues (it will take about $5 billion to join that club), but the rollout is still on track to be more successful than we projected.
This year’s boom will be more impressive than last year’s. Netflix’s US ad revenues were nearly zero in 2022 and just $660 million in 2023, which left room for an outsize 118.4% growth rate last year. Its massive increase this year will be from a much higher base, however, and will show that it can hold its own even as competition intensifies. Just a few years ago, only a couple of major sub OTT providers offered ad-supported tiers. Now they all do, and the competition for connected TV ad dollars is fierce. Netflix’s winning ways represent lost revenues for the others.
Emarketer forecasts Netflix’s strong ad growth in 2025 will put it in a position to be one of the top two sub OTT ad platforms by the end of the decade. Disney+ rolled out its ad tier at roughly the same time as Netflix, but Emarketer projects Netflix will have almost double the ad revenues of Disney+ by the end of the year. Netflix is already hot on the heels of Peacock, a platform that embraced ads from the very beginning, and not all that far behind longtime leader Hulu. Within a few years, Netflix and Amazon Prime Video will likely be the leaders in sub OTT ad revenues.
In a rapidly evolving sub OTT landscape, Netflix's remarkable ad revenue growth signals a turning point for the platform and the industry at large. By leveraging its expansive reach, enhanced ad tech, and the growing popularity of its ad-supported tier, Netflix has proven it can compete fiercely for connected TV ad dollars. While challenges remain, including heightened competition and the need for continued innovation, Netflix's trajectory underscores its resilience and adaptability. As it edges closer to becoming a top sub OTT ad platform, the company's progress offers a blueprint for success in the crowded and competitive world of streaming.