Netflix, Inc. (NFLX): Business Model Canvas [Dec-2025 Updated]

You're trying to map out the current engine room of Netflix, Inc., and honestly, the whole structure has shifted since that massive $82.7 billion Warner Bros. Discovery deal closed. Forget the old subscription-only narrative; this is a complex machine now projecting revenues between $43.5 billion and $45.1 billion for fiscal 2025, driven by over 300 million global members and a content budget near $18 billion. I've distilled the nine essential building blocks below, showing precisely how they are balancing that huge content amortization with new revenue from the ad-tier and paid sharing fees to maintain their edge. Take a look; it's a masterclass in pivoting at scale.

Netflix, Inc. (NFLX) - Canvas Business Model: Key Partnerships

You're looking at the critical external relationships Netflix, Inc. maintains to fuel its massive content engine and global delivery network. These aren't just vendor agreements; they are strategic integrations that define market access and cost efficiency. Honestly, the scale of these deals is what separates Netflix, Inc. from almost everyone else.

The most significant partnership development in late 2025 is the pending acquisition of Warner Bros. Discovery's streaming and studios business. This deal, announced on December 5, 2025, carries a total enterprise value of $82.7 billion, with an equity value set at $72.0 Billion. Analysts project Netflix, Inc. is paying 25 times the estimated 2026 EBITDA, though they anticipate this multiple could drop to 14 times 2026 EBITDA once cost savings are factored in.

The content pipeline relies heavily on external creators and rights holders. Netflix, Inc. is expected to spend upwards of $18 billion on content production across 50 countries in fiscal 2025. This represents an 11% increase over the $16.2 billion spent in 2024. To put that content spend in context, Netflix, Inc. reported Q3 2025 revenue of $11.51 billion.

Here's a look at the scale of some of these content and delivery partnerships:

The advertising tier is a growing partnership channel, with the business on track to more than double its ad revenue in 2025. The ad-supported tier has amassed over 40 million monthly active users globally as of August 2025.

Key advertising and measurement partnerships include:

• Partnerships for live events like FanDuel and Verizon for NFL games.
• Measurement collaborations with Nielsen and VideoAmp.
• Integration with Amazon DSP and AJA DSP for programmatic buying.
• Data access partnerships with Experian and Acxiom.

For the ad-supported members, they see approximately four minutes of ads per hour of viewing, which they cannot skip. In Q3 2025, Netflix, Inc. recorded its highest quarterly view share ever in the US at 8.6% and in the UK at 9.4%. Overall, Netflix, Inc. accounts for 7.3% of time spent with digital by US adults this year. You'll notice that the US upfront commitments doubled during Q3 2025.

The delivery network is built on the Open Connect program, which involves deep integration with Internet Service Providers (ISPs). Netflix, Inc. partners with over a thousand ISPs globally. This proprietary Content Delivery Network (CDN) is responsible for moving a substantial amount of data, estimated at 15% of the world downstream internet traffic. The company is also pushing video codec efficiency, with AV1 now powering approximately 30% of all Netflix streaming as of late 2025. The Open Connect system, which Netflix, Inc. started investing in in 2012, is now being enhanced with AI capabilities for optimized delivery.

You should also note the operational metrics that underpin the success of these partnerships:

• Full-year 2025 free cash flow is expected to be about $9 billion.
• Q2 2025 revenue was $11.08 billion.
• Q3 2025 operating margin was 28%, despite a one-off Brazilian tax charge.
• The company has 301.6 million global paid subscribers as of early 2025.

The company is focused on growing organically, though M&A opportunities like the Warner Bros. Discovery deal are being pursued. If onboarding takes 14+ days, churn risk defintely rises.

Netflix, Inc. (NFLX) - Canvas Business Model: Key Activities

You're looking at the core engine driving Netflix, Inc.'s growth as of late 2025. These are the actions the company must execute flawlessly to maintain its market position.

Producing and acquiring exclusive, high-quality original content

Netflix, Inc. is aggressively funding its content pipeline. The planned cash content spending for fiscal 2025 is set at $18 billion, which represents an 11% increase over the $16.2 billion spent in 2024. This investment is seen as essential for achieving margin targets, with CFO Spencer Neumann stating they are 'not anywhere near a ceiling' on content investment. The company continues to secure licensed content, such as the debut of Sony Pictures' Venom: The Last Dance, which generated 12.8 million global views on its platform debut. The content strategy also involves building franchises around existing hits like Squid Game, Wednesday, and Stranger Things.

Developing and maintaining the proprietary global streaming platform and ad tech

The global streaming platform is the delivery mechanism for all content, and a major activity is enhancing its advertising capabilities. Netflix is rolling out its proprietary ad tech platform, the Netflix Ads Suite, with plans to set it live everywhere by the end of 2025. This is tied to a goal to roughly double advertising revenue in 2025. The ad-supported tier has seen significant adoption, with about 55% of new subscribers opting for this plan in the fourth quarter of 2024 in markets where it is available. As of May 2025, the ad-supported tier reached 94 million global monthly active users. The company had over 301.6 million global paid subscribers as of August 2025.

Data-driven content recommendation and personalization algorithm refinement

While specific financial metrics for the recommendation engine are not public, the activity is crucial for retaining the 301.6 million global paid subscribers. The platform's success relies on keeping users engaged, with reports suggesting that on average, Netflix users spend around 63 minutes per day watching content. The entire content investment of $18 billion in 2025 is predicated on the ability of these algorithms to match content to the right viewer, driving perceived value per dollar.

Expanding into mobile gaming and live event programming (e.g., NFL, WWE)

Netflix, Inc. is actively expanding into new entertainment formats. The live event programming saw the debut of WWE Raw! in January 2025, part of a 10-year, $5 billion exclusive deal. The company also streamed two NFL games on Christmas Day 2024, which drew nearly 65 million viewers combined, with the 2024 game alone generating an estimated $25-$35 million in ad revenue in a single day. In mobile gaming, the company continues to invest, though the funds are small relative to the overall content budget. The San Andreas title accumulated an estimated 51 million installs, and Squid Game: Unleashed has over 25 million installs. Daily active user counts across all games hover around 1.1 million.

Here's a quick look at the scale of these new content activities:

Localized content production across over 50 countries

The content strategy is explicitly global, with production commitments deepening ties in key regions. Netflix, Inc. has pledged to invest $1 billion in Mexican production and $2.5 billion in Korean content. The company's content is produced across more than 50 countries. To support this global footprint, the user interface is localized to support more than 30 languages with subtitles and dubbing available for most titles. The US remains the largest single market with 81.44 million subscribers, but growth is heavily reliant on these localized efforts.

The scale of the global operation requires significant technology and content investment, as shown below:

• Global Paid Subscribers (as of August 2025): 301.6 million
• Projected 2025 Revenue Guidance: $43.5 billion to $44.5 billion
• Ad-Supported Tier New Sign-ups Share (Markets Available): 55%
• Content Production Footprint: Over 50 countries

Netflix, Inc. (NFLX) - Canvas Business Model: Key Resources

You're looking at the core assets that let Netflix, Inc. operate and dominate the streaming landscape as of late 2025. These aren't just line items on a balance sheet; they are the engines driving subscriber growth and market power. Honestly, the sheer scale of what they own and control is what sets them apart from nearly everyone else.

Content Library and Intellectual Property

The content itself is the primary asset, and Netflix, Inc. is pouring capital into maintaining and expanding this library. They project a cash content spend of approximately $18 billion for the fiscal year 2025. This massive outlay funds everything from tentpole original films to localized series, ensuring they have something fresh for their global audience.

While specific details on the licensing of major third-party IP like HBO/DC franchises aren't always public, the investment strategy clearly supports high-value, globally appealing content, including their own expanding franchises like Extraction and Wednesday. The commitment is clear: they are not anywhere near a ceiling on content investment.

Proprietary Recommendation Engine and User Data

This is where the magic happens, turning a massive library into a personalized experience for every viewer. The proprietary recommendation engine is so effective that it drives over 80% of all content streamed on the platform. This level of personalization is a huge competitive moat, saving Netflix, Inc. an estimated $1 billion annually by keeping subscribers engaged and reducing cancellations.

The system has evolved, now leaning into a Foundation Model for Personalized Recommendation, borrowing principles from Large Language Models to handle the complexity at scale. This engine processes billions of viewing events daily, using deep learning models to predict what you'll enjoy next.

Global Streaming Infrastructure (Open Connect CDN)

Delivering that content seamlessly across the globe requires infrastructure that competitors simply don't possess. Netflix, Inc.'s in-house Content Delivery Network, Open Connect, is the backbone. This proprietary system places caching infrastructure close to end-users, which significantly reduces latency and transit costs.

The Open Connect Appliances (OCAs) are provided to qualifying ISP partners at no charge, with over 1,000 ISPs having installed them. In congested networks, Open Connect has been shown to improve data throughput by up to 40% compared to standard global CDNs. Furthermore, the adoption of the AV1 open video codec now powers about 30% of all viewing, which helps reduce traffic on the Open Connect CDN by using one-third less bandwidth than older codecs.

Scale of Membership and Reach

The user base provides the necessary data volume to feed the recommendation engine and the revenue base to fund the content spend. As of August 2025, Netflix, Inc. reported reaching 301.6 million global paid memberships. The company operates in over 190 countries.

Here are the key quantitative resources as of late 2025:

You should review the Q4 2025 revenue guidance against this content spend to confirm margin targets are still on track. Finance: draft the Q4 2025 cash flow impact analysis by next Tuesday.

Netflix, Inc. (NFLX) - Canvas Business Model: Value Propositions

You're looking at the core reasons why subscribers choose Netflix, Inc. (NFLX) over the growing number of alternatives. It really boils down to content access, pricing flexibility, and the overall experience.

Unlimited, on-demand access to a massive, diverse content library

The sheer volume and variety of content remain a primary draw. Netflix, Inc. is investing heavily to maintain this library, which is crucial given its strategic pivot away from solely reporting subscriber counts to focusing on revenue and engagement metrics. The company announced a cash content spend of $18 billion for fiscal 2025, representing an 11% increase over the 2024 spend of $16.2 billion. This investment supports a library that, as of late 2025, is estimated to still serve over 301.6 million global paid subscribers.

Here's a quick look at the scale of the business as of late 2025:

Tiered pricing model offering flexibility (ad-supported tier at $6.99-$7.99/month)

Netflix, Inc. uses pricing tiers to capture a wider range of willingness-to-pay, successfully converting some former subscribers to lower-cost options. The ad-supported tier, which exceeded expectations by allowing people who quit to trade down, saw a price increase in January 2025. The current Standard with Ads plan is priced at $7.99/month, up from $6.99/month. This flexibility helps keep the platform as a core subscription for many.

Here's the breakdown of the most recent US pricing structure following the January 2025 hikes:

It's important to note that in countries where the ad tier is available, it accounts for 40% of new signups.

Exclusive, culture-defining original series and films

The value proposition is heavily weighted on content that generates cultural conversation. The CFO specifically hyped upcoming new seasons of titles like "Squid Game," "Wednesday," and "Stranger Things" as major 2025 content events. This focus on high-impact originals drives engagement, which the company now uses as its best proxy for customer satisfaction.

• Driving cultural moments like the NFL Christmas Day games, which reportedly cost $150 million per game.
• Strengthening offerings in K-dramas and documentaries.
• Securing exclusive Pay 1 window content, such as the debut of Sony Pictures' Venom: The Last Dance.

Seamless, personalized viewing experience across all major devices

The platform offers a consistent, high-quality experience regardless of the device you use. This is supported by the company's focus on product innovation and enhancing the user experience, which is expected to help drive revenue growth in 2025. The platform is available globally, with only a few specific territories being denied access.

Access to live sports and experiential entertainment (e.g., Netflix House)

Netflix, Inc. is actively expanding beyond traditional on-demand content into live and physical experiences to deepen fan connection. This includes a significant commitment to live programming.

• Began live-streaming WWE Raw! in January 2025 under a $5 billion, 10-year exclusive deal.
• The company is open to pursuing more sports rights if they make economic sense, focusing on special events over full seasons.
• Launched its first permanent physical venues, Netflix House, in late 2025, with the King of Prussia, Pennsylvania location opening in November and the Galleria Dallas location opening on December 11.
• These venues offer fan experiences, merchandise, and food inspired by shows, aiming to build deeper connections beyond the screen.

Finance: draft the Q4 2025 cash flow projection incorporating the $18 billion content spend by Friday.

Netflix, Inc. (NFLX) - Canvas Business Model: Customer Relationships

You're looking at how Netflix, Inc. keeps its massive user base engaged and monetized in late 2025. It's all about using data to make every user feel like they have a bespoke service, even as they roll out new ways to charge for access.

Automated, data-driven personalization and content curation

Netflix, Inc. relies heavily on its recommendation engine to drive consumption. Around 80% of Netflix views come from algorithm suggestions. The platform uses sophisticated systems to segment its audience, which, as of earlier data, involved 1,300 "recommendation clusters" built through viewing preferences. This deep personalization helps keep the average user engaged for about 63 minutes per day on the platform in 2025.

Self-service model for sign-up, billing, and cancellation

The core relationship is entirely digital and self-managed. Netflix, Inc. maintains a conversion rate of about 93% for its sign-up process. You manage everything-from plan changes to stopping service-through the app or website. To reflect the business's evolution toward revenue focus, Netflix, Inc. announced it would stop sharing quarterly membership numbers and ARM (average revenue per membership) starting in 2025.

Paid sharing model to monetize users outside the primary household

Monetizing password sharing has been a major focus. Enforcement efforts in 2024 appear to have successfully converted many non-paying users into paying subscribers. The ad-supported tier shows significant uptake, reaching 94 million users as of May 2025. This lower-cost option accounted for close to 30% of all subscribers in 2024. The push for paid sharing and ad tiers is designed to increase the overall revenue base, which is projected to hit $44 billion for the full year 2025.

Experiential engagement via physical locations (Netflix House) and fan events (Tudum)

Experiential marketing is a key tool for driving brand loyalty and press. The 2025 Tudum fan event, held at the Kia Forum in Los Angeles, sold out its 17,000 in-person seats. This single event generated 1.4 billion global impressions across Netflix and talent social handles. The exclusive live stream of Tudum 2025 drew over 25.7 million live views across all of Netflix, Inc.'s platforms. For comparison, the 2020 Tudum in Brazil drew 50,000 people over four days. Netflix, Inc. is also moving into physical brand alignment with concepts like 'Netflix House,' though specific operational or financial metrics for these locations are not yet public. The 2025 event featured over 100 Netflix stars and creators.

Social media and in-app communication for new content announcements

The 2025 Tudum event served as a massive communication hub, with the announcement for the 'Stranger Things 5' finale dates alone generating 250 million impressions in 96 hours. This shows the direct link between exclusive content reveals and social media reach. The platform continues to use in-app notifications for personalized content drops and announcements. The company is investing heavily, with a content spend projected at $18 billion for 2025.

Here is a look at the regional revenue per user context, based on the latest available full-year data before the 2025 reporting shift:

Overall, Netflix, Inc. had over 301.6 million paid subscribers globally as of August 2025. The revenue generated in the first three quarters of 2025 reached $33.12 billion, with a net income reported at $2.54 billion for Q3 2025.

Finance: draft 2026 content spend vs. projected revenue growth analysis by Friday.

Netflix, Inc. (NFLX) - Canvas Business Model: Channels

You're looking at how Netflix, Inc. (NFLX) gets its content and merchandise in front of its massive audience as of late 2025. The core channel remains direct, but the supporting ecosystem is getting more complex.

Direct-to-consumer via the Netflix website and mobile applications

This is the primary artery for Netflix, Inc. (NFLX). As of August 2025, the platform reached 301.6 million global paid subscribers. The revenue flow from this direct channel is substantial; Q3 2025 saw revenue hit $11.51 billion, marking a 17% year-over-year increase. The full-year 2025 revenue forecast is now between $44.8 billion and $45.2 billion.

The ad-supported tier is a key component of this direct channel, now boasting over 40 million monthly active users as of 2025. Management reiterated its commitment to doubling ad revenue in 2025, building on a projection of $3 billion in annual ad revenue for the year.

Here's a look at the revenue scale from the largest geographic segment:

The platform's operational efficiency is improving; the Q3 2025 operating margin, excluding a one-time tax charge in Brazil, would have exceeded the forecast of 31%.

Pre-installed apps on Smart TVs (e.g., LG, Sony, Samsung)

Smart TVs are a critical access point, often representing the primary viewing environment. Netflix, Inc. (NFLX) has been optimizing this experience. Around half of members have used the redesigned TV interface that rolled out broadly in Q2 2025. This seamless integration, often achieved through pre-installation agreements with manufacturers like LG, Sony, and Samsung, keeps the service front-of-mind for household viewing.

Gaming consoles (PlayStation, Xbox) and streaming media players (Roku, Apple TV)

The gaming vertical acts as an engagement channel, though its direct revenue contribution is still developing. Netflix, Inc. (NFLX) has over 70 games in its portfolio. Long-term, the company sees games generating roughly $140 billion in consumer spending, though this excludes ad revenues.

Performance on these platforms shows mixed engagement. For example, GTA: San Andreas - NETFLIX demonstrated a download rate tapering from 64.8K to 33.6K by the end of September 2025.

Here are some top-performing game metrics in the US for Q3 2025:

The service is also accessible via streaming media players like Roku and Apple TV, which are essential for households without native Smart TV app support or those preferring dedicated hardware.

Physical retail for merchandise (Netflix.shop)

The Netflix.shop e-commerce channel monetizes fandom directly. In October 2025, this channel generated online sales of $6,058,880 across 22,031 transactions. This represented a 75% revenue growth over the preceding three months.

The Average Order Value (AOV) for merchandise is quite high, sitting between $275 and $300 in October 2025. For the holiday season, a 35% discount was offered on merchandise from shows like Squid Game and One Piece.

Key October 2025 E-commerce Metrics for Netflix.shop:

• Revenue: $6,058,880
• Sessions: 1,416,876
• Average Order Value (AOV): $275 to $300
• Conversion Rate: 1.50% to 2.00%

The company also announced plans for two U.S. brick-and-mortar 'Netflix House' locations by 2025, viewing these as promotional tools more than immediate revenue drivers. Finance: draft 13-week cash view by Friday.

Netflix, Inc. (NFLX) - Canvas Business Model: Customer Segments

You're looking at the customer base for Netflix, Inc. (NFLX) as of late 2025. It's a massive, global audience, but the way they pay and what they expect is getting more segmented, which is key to understanding their revenue focus now that they've stopped reporting quarterly subscriber counts.

Global Mass Market Reach

Netflix serves a global mass market, operating in over 190 countries. Honestly, the only places you won't find the service are North Korea, Syria, China, and Crimea. As of August 2025, the total paid subscriber count was estimated at approximately 301.6 million globally. This scale is what allows them to invest heavily in content. The company shifted its primary financial metrics away from quarterly subscriber counts starting in Q1 2025, focusing instead on revenue and operating margin, but major milestones are still announced.

The geographic distribution of these members, based on the last reported regional split from Q4 2024, shows significant density:

• Europe, Middle East & Africa (EMEA): 101.1 million subscribers.
• U.S. & Canada: 89.6 million subscribers.
• Asia-Pacific: Approximately 57.5 million subscribers.
• Latin America: Approximately 53.3 million subscribers.

Price-Sensitive Consumers and the Ad-Tier

A major segment is the price-sensitive consumer, heavily targeted by the ad-supported tier. This tier has seen significant uptake. By May 2025, there were an estimated 94 million monthly active users on the ad tier worldwide. In the markets where it's available, this plan drove 55% of new sign-ups in the first quarter of 2025. This focus on advertising is clearly a core growth driver, with Netflix aiming to more than double its advertising revenue in 2025 compared to the prior year. In the U.S., viewing on this tier is substantial, accounting for 45% of total household viewing hours as of August 2025.

The pricing structure reflects this segmentation, with the ad-supported option being the entry point for many new members:

Premium Users and Household Sharing

The other end of the spectrum is the premium user, who demands the best quality and flexibility. These customers pay up to $24.99 per month for ad-free access, 4K Ultra HD resolution, and the ability to stream on up to 4 supported devices simultaneously. Still, account sharing outside the primary household remains a factor, managed through the paid sharing option. For primary account holders adding an extra member who streams ad-free, the fee is reportedly $8.99 per month following the January 2025 price adjustments.

Primary Engagement Demographics

Millennials and Gen Z represent the core, highly-engaged audience. The ad-supported tier specifically reached more users in the 18-34-year-old demographic. Overall engagement remains high; on average, Netflix users spend around 63 minutes per day watching content on the platform. This deep engagement is what Netflix uses as its best proxy for customer satisfaction now that subscriber counts are less emphasized.

Finance: draft 13-week cash view by Friday.

Netflix, Inc. (NFLX) - Canvas Business Model: Cost Structure

You're looking at the engine room of Netflix, Inc. (NFLX), the costs that fuel its global content machine as of late 2025. This is where the massive revenue-which hit about $45.1 billion for the full year 2025-gets allocated to keep subscribers engaged.

Content Amortization and Cash Content Spend

The biggest line item, without question, is content. Netflix projected its cash content spend for fiscal year 2025 to be $18 billion. That's an 11% jump from the $16.2 billion spent in 2024. Honestly, management has made it clear they aren't near a ceiling on this spending; they feel they are still just getting started. You should note that the cash spend and content amortization maintain a ratio of approximately 1.1, which is growing slower than revenue, signaling some discipline in the spend relative to top-line growth. This massive outlay funds the originals that drive cultural moments, but also includes strategic, high-profile live rights.

Here are some concrete examples of content-related costs:

• Projected Cash Content Spend for 2025: $18 billion.
• Cash Content Spend in 2024: $16.2 billion.
• Cost for two exclusive Christmas Day NFL games (reportedly): $150 million each.
• The 10-year exclusive deal for WWE Raw! is valued at $5 billion.

Technology and Development Costs

Keeping the platform running for over 300 million global paid subscribers requires serious engineering muscle. This category covers everything from cloud hosting infrastructure to the salaries for the engineers building out new features like interactive gaming controls. Research and Development (R&D) expenses for the twelve months ending September 30, 2025, reached $3.278 billion. For just the third quarter ending September 30, 2025, the quarterly R&D expense was $853.58 million. The company is heavily investing in its product and engineering teams specifically to bolster its advertising technology, live event capabilities, and games integration.

Marketing and Promotion Expenses

You can't just make great content; you have to make sure people know about it, especially with thousands of titles available. The Selling and Marketing Expense for the latest twelve months ending September 2025 hit $3.164 billion, which is consistent with the annual marketing and advertising spend being over $2.9 billion. What's interesting is the agility here: the CMO reserves about a quarter of the total marketing budget specifically to 'chase the heat' on surprise viral hits, ensuring reactive amplification for titles that suddenly take off. This is crucial as the ad-supported tier is expected to double its revenue again in 2025.

General and Administrative Costs and Acquisitions

These are the overhead costs of running a global corporation, including executive salaries, legal, and finance functions. The Selling, General & Administrative (SG&A) Expenses for the twelve months ending September 30, 2025, were $4.938 billion. Separately, the General and Administrative (G&A) expenses for the same trailing twelve-month period were $1.774 billion. The biggest G&A factor looming is the massive acquisition of the Warner Bros. Discovery studio and streaming businesses, valued at an equity price of $72 billion (enterprise value of about $82.7 billion). On the upside, Netflix projects it will record between $2 billion and $3 billion in annual cost savings from this deal due to synergy realization.

Licensing Fees for Third-Party Content and Sports Rights

While Netflix is famous for originals, licensed content remains a cost driver, often being cheaper than original development and providing proven audience familiarity. The company continues to secure exclusive Pay 1 window deals for theatrical films and has licensed popular third-party TV series. The recent landmark licensing agreement with Warner Bros. Discovery (WBD) is a major component, securing a powerful influx of catalog content. This WBD deal is expected to provide WBD with a revenue stream estimated in the low billions annually from Netflix licensing fees. The table below summarizes the key cost components we can quantify for 2025.

Here is a snapshot of the major cost structure components for Netflix, Inc. as of late 2025:

Netflix, Inc. (NFLX) - Canvas Business Model: Revenue Streams

You're looking at the core engine driving Netflix, Inc.'s financial results for late 2025. The revenue streams are a blend of reliable recurring income and high-growth diversification efforts.

Subscription Fees from Tiered Plans remain the foundational element of Netflix's income. The company has refined its pricing structure across four main tiers following adjustments earlier in the year. The global paid memberships reached approximately 301.6 million as of August 2025.

Here are the reported monthly pricing points for key markets as of January 2025:

Based on the overall revenue guidance, the subscription portion is the largest component. With total revenue projected near $45.1 billion, and advertising contributing significantly, the subscription revenue is estimated to be in the range of $41.9 billion (inferred from total revenue minus ad revenue projections).

Advertising Revenue from the Ad-Supported Tier is the fastest-growing segment. Management has highlighted momentum, expecting ad sales to roughly double for the year.

• US ad revenue is projected to surpass $2.15 billion in 2025.
• Total estimated ad revenue for 2025 is projected to be around $3.2 billion.
• The ad-supported tier accounted for 40% of new sign-ups in available markets by the end of 2024.
• Global ad-supported monthly active users reached 94 million in May 2025.

Paid Sharing Fees for Extra Member Slots represent revenue captured from previously shared, unpaid accounts. While the company stopped reporting Average Revenue Per Membership (ARM) in 2025, the monetization of extra member slots is a key driver of revenue growth outside of core subscription price hikes. An analyst estimate from 2022 suggested that expanding the test globally could add up to $1.6 billion in annual revenue.

Content Licensing and Merchandising (Netflix.shop) provides supplementary, albeit smaller, revenue streams. Netflix is investing heavily to fuel its content engine, with content amortization expected to surpass $16 billion for the year.

• Content spending is projected to reach $18 billion in 2025.
• Merchandising revenue is generated through platforms like Netflix.shop and live events.
• The company licenses content to other platforms and networks, though this is a smaller slice compared to subscription income.

Overall, Netflix projects its Total Revenue for the full year of 2025 to be between $43.5 billion and $45.1 billion.