Netflix continues its success story thanks to advertising subscription
Netflix had another great quarter, partly because its ad-supported subscription plan is doing well. In the future, Netflix plans to use AI more.
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Netflix can look back on another successful quarter. In the second quarter of 2025, the US streaming service generated US$11 billion in revenue, representing an increase of 16 percent compared to the same period last year. Netflix has raised its forecast for the full fiscal year to US$44.8 billion to US$45.2 billion in revenue.
Netflix said this was not only due to the weak US dollar but also to growth in subscribers and advertising sales. The streaming service no longer discloses exact subscription figures; instead, it focuses on financial indicators. This is also due to the success of the advertising subscription: it attracts numerous new customers who are often more profitable for Netflix than customers with a traditional subscription.
New advertising formats and AI
In May, Netflix announced that it currently has 94 million advertising subscription customers worldwide. To continue generating more revenue from them, will Netflix implement additional advertising formats. Among other things, the streaming service plans to display advertisements even when playback is paused. A format that has become popular with streaming services and has also been implemented by YouTube and Amazon Prime Video in recent years. All customers who have opted for the cheaper subscription model starting at 5 euros per month see advertising.
Netflix sees AI as a way to reduce the cost of producing new content. According to the BBC, CEO Ted Sarandos said in a conversation with investors that artificial intelligence could make CGI effects cheaper. For example, in the Argentine Netflix series “The Eternauts,” a collapsing building in Buenos Aires was created using an AI video generator.
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Sarandos said that AI could be particularly helpful for smaller productions with limited budgets. Compared to traditional special effects tools, AI is also ten times faster. The collapsing house in “The Eternauts” is the first example of an AI sequence in a Netflix original production.
The use of AI was also one of the triggers for the recent Hollywood strikes, as screenwriters and actors fear that studios could replace them with software in the future.
(dahe)
