Behind the Numbers: An In-Depth Analysis of Netflix’s Future

Episode: TikTok’s Fate, LinkedIn’s Content Pivot, and Why Reddit is a Sleeping Giant | Released May 19, 2025

In this episode of EMARKETER’s "Behind the Numbers" podcast, host Marcus engages with senior analysts Ross Benish and Paul Werner to delve into the current state and future prospects of Netflix. The discussion navigates through Netflix’s resilience in economic downturns, ambitious subscriber growth targets, strategic ventures into video podcasts, enhancements in search through artificial intelligence (AI), and the company’s aspirations in ad revenue. Below is a comprehensive summary of their conversation, enriched with key insights and notable quotes.

1. Is Netflix Recession Proof?

Ross Benish rates Netflix’s recession resilience at 8 out of 10, highlighting its strong subscription-based model which mitigates reliance on fluctuating ad revenues. He states:

"I believe most people will continue subscribing to Netflix. They're going to be probably stuck at home and spending less on entertainment outside the home because that's more expensive." (03:45)

Paul Werner slightly moderates this optimism, assigning a 7 out of 10 score. He points out potential vulnerabilities, such as price increases and the uncertain economic climate:

"We are in a very uncertain time and we will be for quite a while... they have raised their prices... people might be more selective about when they subscribe to Netflix." (04:54)

Despite these concerns, both analysts concur that Netflix's focus on subscriptions rather than advertising positions it better than many competitors during economic turbulence.

2. Netflix’s Subscriber Growth Goals

Netflix aims to expand its subscriber base from 300 million to 400 million by 2030. Paul Werner is optimistic about achieving this target, citing untapped international markets:

"There’s a lot of opportunity... countries in Asia Pacific, notably India, even, I think, in Brazil... there's still quite a bit of opportunity for growth." (07:49)

Conversely, Ross Benish expresses skepticism, noting Netflix's cessation of quarterly subscriber reporting as a potential indicator of slowing growth:

"I don't expect them to hit that metric because they're not reporting quarterly subscribers anymore... they stopped before they would start reporting flat numbers." (08:52)

Marcus adds data supporting Ross’s view, mentioning that Netflix lost U.S. subscribers in Q1, with growth slowing from previous years' international expansions.

3. Expansion into Video Podcasts and Content Creation

Netflix is exploring the integration of video podcasts and attracting content creators from platforms like YouTube. Marco's question to Ross:

"Do video podcasts and content creators fit nicely into Netflix's offering in your opinion?" (11:26)

Ross Benish believes this move could seamlessly attract new content producers:

"There won't be a strong division in the future between social media creators versus Hollywood producers... creators will become valuable to Netflix, especially for very young viewers." (12:12)

Paul Werner draws parallels with Spotify’s celebrity deals, suggesting that Netflix has the resources to attract high-profile content creators:

"Netflix has the capacity and the resources... you could easily spin off some podcasts that would instantly... draw a lot of attention." (13:13)

However, Marcus raises concerns about rebranding Netflix to accommodate podcasts, likening it to Spotify's limited success in expanding beyond music:

"I wonder if Netflix can rebrand themselves to make people think… they're the place for podcasts or content creators." (12:47)

4. AI-Infused Search and Discovery Enhancements

Addressing Netflix’s efforts to improve content discovery, Ivan Mehta of TechCrunch notes Netflix's development of an AI-powered interactive search:

"Netflix is building a new AI infused interactive search experience aimed at improving discovery." (14:26)

Paul Werner acknowledges the potential of AI in enhancing search but emphasizes the current limitations:

"AI systems will get a lot better... in the next year, two, three years." (19:25)

Ross Benish remains critical of AI’s current role in search, citing inaccuracies and potential UX issues:

"AI just presents some unfactual information more often... search is still being figured out, for sure." (17:55)

Despite differing views, both analysts agree that while AI holds promise, its effectiveness in resolving Netflix’s search challenges is contingent on technological advancements and thoughtful implementation.

5. Netflix’s Ad Revenue Ambitions

Netflix has set an ambitious target of $9 billion in worldwide ad revenue by 2030, with current U.S. ad revenues projected to exceed $2 billion this year based on EMARKETER’s forecasts.

Ross Benish finds this goal achievable, attributing it to international expansion and the potential of ad-supported tiers:

"There’s a lot of regions where they can reach more viewers... $9 billion in today's terms, with significant inflation by 2030." (22:15)

However, Paul Werner remains skeptical, describing the target as a "Hail Mary" and predicting it may fall slightly short:

"If I had to handicap it, I'd say probably, like maybe they get to eight, but not nine." (24:20)

Marcus references Dan Gallagher of the Wall Street Journal, who observes the slow progress in Netflix's ad business despite a large subscriber base:

"Netflix is building its ad business, but it's been surprisingly slow going." (23:01)

Ross concedes that while the ramp-up has been slower than expected, the long-term potential remains substantial as Netflix continues to develop its ad technology and expand its ad-supported offerings globally.

6. Ad-Supported Subscription Growth

Recent data indicates a rise in ad-supported subscriptions in the U.S.:

"43% of US customer signups in February were for the ad supported tier, up from 40% in January." (25:14)

This incremental growth suggests a positive trend, albeit gradual, towards diversifying Netflix’s revenue streams beyond traditional subscriptions.

Conclusion

The podcast provides a nuanced examination of Netflix's strategic positioning amid economic uncertainties and evolving digital landscapes. While Netflix demonstrates significant strengths through its subscription model and international growth prospects, challenges such as reaching ambitious subscriber targets, effectively integrating new content formats, and scaling its ad revenue remain. The analysts underscore the importance of innovation, particularly in AI-driven search and personalized content recommendations, as critical for Netflix to maintain its competitive edge and achieve its long-term financial goals.

Notable Quotes:

• Ross Benish on Netflix’s recession resilience:

  "I believe most people will continue subscribing to Netflix. They're going to be probably stuck at home and spending less on entertainment outside the home because that's more expensive." (03:45)

• Paul Werner on subscriber growth uncertainty:

  "We are in a very uncertain time and we will be for quite a while... people might be more selective about when they subscribe to Netflix." (04:54)

• Ross Benish on AI in search:

  "AI just presents some unfactual information more often... search is still being figured out, for sure." (17:55)

This summary encapsulates the key discussions and insights from the episode, providing valuable takeaways for marketers, retailers, and advertisers keen on understanding Netflix’s trajectory in the digital media landscape.

Timestamps:

• 03:45 - Discussion on Netflix’s recession resilience
• 04:54 - Paul’s perspective on economic uncertainties
• 07:49 - Subscriber growth targets
• 08:52 - Ross’s skepticism on reaching 400 million subscribers
• 11:26 - Integration of video podcasts
• 12:12 - Value of content creators to Netflix
• 12:47 - Challenges in rebranding for podcasts
• 14:26 - AI-powered search features
• 17:55 - Ross’s critique of AI in search
• 19:25 - Paul’s optimism on AI improvements
• 22:15 - Ad revenue targets by 2030
• 23:01 - Slow progress in ad business
• 24:20 - Paul’s skepticism on ad revenue goals
• 25:14 - Growth in ad-supported subscriptions