A different kind of Netflix ad: a billboard for ’Beverly Hills Cop: Axel F' (Beata Zawrzel/NurPhoto via Getty Images)

Adding Down?

Netflix's ads tier is growing but it's not the savior the company hoped for — yet

Last year they were telling a different story about ads profitability.

7/19/24 10:24AM

A year ago, Netflix said it was making more money from ads subscriptions than the more expensive ad-free options. During 2023’s Q2 earnings call, Chief Financial Officer Spence Neumann said, “Our overall ads ARM continues to be higher than basic ad free globally,” referring to average revenue per membership, which is a combination of the subscription fee and ads revenue.

That seems to have changed. “Currently our ads ARM is lower than our non-ads ARM,” Co-CEO Greg Peters said on the earnings call yesterday.

What happened?

“Currently because we've been scaling so rapidly, we're racing behind essentially to fulfill all of that increasing inventory. And we're lagging in that regard,” Peters said.

In other words, it seems people are signing up for the ads tier so quickly, Netflix has more room to show ads than it has deals with advertisers or the ad tech is not good enough to meet this increased demand, meaning they are not able to effectively monetize all these new views with ads.

“We're on track to achieve our critical scale goals for all of our ads countries in 2025,” he said.

“We're adding more sales folks. We're adding more ads operation folks, building our capabilities to meet advertisers. A big component of that is giving advertisers more effective ways to buy Netflix.”

Netflix already appears to be shaking up its ad team. Yesterday, media industry vet Peter Naylor became the second of two senior executives to leave the ad team.

Netflix introduced its lower cost ads tier in limited markets a year and half ago. In May the company said its ad-supported tier had 40 million global subscribers, or almost double what it was in January. That meant ads subscribers represented about 15% of all subscriptions.

Netflix reported that this quarter its ads tier grew 34% from last quarter, but didn’t say how many subscribers that was. It did say a full 45% of new signups in ads markets was for the ad tier last quarter, growing from 40% in Q1.

For now, Neumann called ads a “meaningful contributor” to the streaming company’s revenue.

“When you get into 2026 and beyond, it can be even more meaningful, and hopefully it becomes the point where it is a primary contributor given all that engagement and reach that we're building,” he said.

Rani Molla

Meta posts an earnings and revenue beat — and a huge capex bill

The social media giant reported earnings after the bell Wednesday.

Meta CEO Mark Zuckerberg visits U.S. Capitol for Senate meetings

Rani Molla, Nate Becker

Alphabet jumps as Q1 earnings and revenue blow past expectations

The search giant also boosted its capex forecast for the year and said it expects 2027 capex to be “significantly” higher than 2026.

Rani Molla10h

SpaceX filings reportedly show no one can fire Elon Musk except Elon Musk

The only thing stopping Elon Musk from being chairman and CEO of SpaceX is Elon Musk, according to Reuters, which viewed an excerpt of the company’s IPO filing.

The document outlines a dual-class share structure giving Musk control via super-voting stock. The filing says he “can only be removed from our board or these positions by the vote of Class B holders” — shares he’ll control after the listing. It adds that if he keeps those shares, he could “continue to control the election and removal of a majority of our board.”

At a typical public company — even founder-led ones with dual-class structures — a CEO can be fired by the board of directors, which represents shareholders and can vote to remove them over issues such as corporate performance, strategy, or misconduct.

The unusual SpaceX setup means Musk is unlikely to face the kind of CEO succession pressure he’s dealt with at Tesla. Musk, of course, is not a typical CEO, and the value of his companies has long been closely tied to his presence.

To be sure, SpaceX’s confidential IPO filing isn’t in its final form yet — while the filing is still in the confidential phase, the company will be going back and forth with the SEC, which will review it and suggest or require changes.

Exclusive: Only Elon Musk can fire Elon Musk from SpaceX, filing shows

Rani Molla4/28/26

OpenAI’s models are officially coming to Amazon

Amazon is finally getting in on the hottest ticket in tech.

After Microsoft announced yesterday that it has agreed to give up its exclusive rights to sell OpenAI’s models, Amazon, as expected, will start offering them to customers — something Amazon Web Services CEO Matt Garman says users have been asking for “for a really long time.” Some models are available now in preview, and the most powerful GPT versions will show up “in the coming weeks.”

This is a big shift in the AI cloud wars. Microsoft’s early bet on OpenAI gave Azure an edge by locking up the most in-demand models. Now that exclusivity is gone, Amazon and other competitors can finally offer them too, closing a key gap and competing more directly for AI customers.

Amazon Set to Sell OpenAI Tech After Microsoft Cedes Exclusivity

Claire Yubin Oh4/28/26

Ship-tracking app surges as Iran war continues

As Middle East peace talks stretch on, with Tehran reportedly offering to reopen the Strait of Hormuz if the US lifts its blockade and the war ends, the owner of shipping intelligence platform MarineTraffic revealed that the app has gained millions of new users since the conflict began.

MarineTraffic’s user count jumped to 8.5 million this April, up from 3.5 million a year ago, the cofounder of its parent company, Kpler, said in an interview with the Financial Times. Paid subscribers, often workers within companies and governments looking for more data on supply chains and commodities trading, rose 11,000 in the same period.

Kpler, which also owns shipping intelligence platform FleetMon, draws its data from a range of sources, including the Automatic Identification System, satellites, and more than 500 people on-site, like port terminal operators.

Per Appfigures data, MarineTraffic is estimated to have raked in almost $1 million across March and April in app revenue (through April 27), more than double the ~$346,500 from the same months last year. Across the full year, Kpler expects to earn between $300 million and $400 million in annual recurring revenues.