Netflix’s Expansion in Europe and Strategy for 2025: Subscription Changes, Ad Revenue Growth, and Competitive Landscape

Netflix’s European Expansion in 2024

Netflix significantly strengthened its position in Europe throughout 2024, continuing its aggressive content investment and market expansion. The streaming giant’s European subscriber base saw steady growth, fueled by a combination of original content tailored to local markets, strategic partnerships, and advancements in its ad-supported tier.

By the end of 2024, Netflix had added approximately 19 million new subscribers globally, with a substantial portion coming from European markets, bringing its total subscriber count to nearly 300 million worldwide. Much of this growth was attributed to the success of hit shows such as Squid Game: The Challenge, as well as its investment in live sports events, which attracted new demographics to the platform.

One of the most notable milestones in Europe was Netflix’s 10-year anniversary in France, where the platform surpassed 10 million subscribers. To maintain momentum in the region, Netflix announced an ambitious content investment plan, committing to producing 24 new projects annually in France by 2026. These projects span original films, series, and documentaries, aiming to further entrench the platform in France’s entertainment ecosystem.

Netflix also expanded in Germany, Spain, and Italy, increasing partnerships with local production studios to create high-quality, regionally relevant content. With more than 50% of European Netflix subscribers engaging with local-language content, this move has been essential in maintaining and growing the user base.

Subscription Tier Adjustments in 2025

To continue its revenue growth, Netflix has announced price adjustments for its subscription tiers in 2025. This marks a significant shift in the company’s pricing strategy, as it looks to balance affordability with profitability while pushing users toward its ad-supported model.

  • Ad-supported plan: Increasing from $6.99 to $7.99 per month in the U.S.
  • Standard ad-free plan: Increasing from $15.49 to $17.99 per month.
  • Premium ad-free plan: Increasing from $22.99 to $24.99 per month.

These price hikes come at a time when Netflix is doubling down on its ad-supported tier, which has seen substantial growth. More than 55% of new subscribers in the last quarter of 2024 opted for the ad-supported plan, reflecting the success of this model. With this momentum, Netflix aims to convert more users to ad-supported plans in key international markets in 2025.

Netflix has also expanded its crackdown on password sharing, a move that has led to increased revenue and forced freeloading viewers to subscribe. This strategy is expected to continue throughout 2025 as the company refines its approach to limiting account sharing without alienating customers.

The Role of Ads: Connected TV and Mobile Growth

Netflix’s advertising business has experienced exponential growth, with its ad-supported tier reaching 70 million monthly active users globally. The ad revenue doubled in 2024, and Netflix has set a target to double it again in 2025, aiming for $4 billion in ad revenue.

One of the most crucial drivers of Netflix’s ad success has been connected TV (CTV) advertising, where brands see higher engagement compared to traditional linear TV ads. With more than 80% of ad-supported Netflix viewing happening on connected TVs, advertisers are increasingly drawn to Netflix’s platform for its premium inventory.

Additionally, mobile users have become an essential focus for Netflix’s ad strategy, particularly in emerging markets where smartphone penetration is high. The company has been optimizing ad formats for mobile users, including:

  • Shorter ad breaks for mobile viewers to enhance user experience.
  • Interactive ad formats, allowing users to engage with content without leaving the platform.
  • AI-driven ad targeting to ensure more personalized advertising.

This shift has enabled Netflix to capture ad budgets previously allocated to digital and social media platforms, positioning it as a top contender in the global advertising landscape.

Financial Projections and Revenue Growth

Netflix’s profitability has surged, thanks to its diversified revenue streams, pricing strategy, and ad-supported tier expansion. The company’s revenue is projected to reach $50 billion in 2025, with advertising contributing nearly 10% of total earnings.

The company has also been focusing on cost efficiency by optimizing content spending and leveraging AI for content recommendations and ad targeting, reducing customer churn and improving engagement. This has helped Netflix maintain a healthy operating margin, projected to be around 25% in 2025.

Competitive Landscape: Netflix vs. Amazon Prime, Disney+, and Apple TV+

Despite its strong position, Netflix faces intense competition from Amazon Prime Video, Disney+, Apple TV+, and other streaming platforms that are aggressively expanding their content libraries and ad-supported offerings.

  • Amazon Prime Video: With its recent integration of an ad-supported model for Prime members, Amazon has positioned itself as Netflix’s biggest rival in the advertising space. Prime Video benefits from Amazon’s vast e-commerce ecosystem, which allows for precise ad targeting based on user purchasing behavior.
  • Disney+: After experiencing a subscriber dip in 2023-2024, Disney+ has rebounded by doubling down on Marvel, Star Wars, and Pixar content while introducing its own ad-supported tier. The platform has also expanded its sports offerings through ESPN+, making it an attractive alternative to Netflix for live content.
  • Apple TV+: Apple continues to differentiate itself through high-budget, critically acclaimed originals, such as Killers of the Flower Moon and Severance. While Apple TV+ has a smaller subscriber base, it benefits from Apple’s bundling strategy with iPhone, Mac, and iCloud services, making it a strong competitor.

Netflix’s ability to retain its market leadership will depend on its ability to innovate in advertising, maintain its strong content pipeline, and expand in high-growth markets such as India, Africa, and Latin America.

Conclusion: Netflix’s Strategic Roadmap for 2025

Netflix’s expansion in Europe, pricing adjustments, and focus on ad-supported revenue signal a transformative shift in its business model. The introduction of price hikes, increased advertising revenue, and a crackdown on password sharing will further solidify its profitability and market leadership.

With $4 billion in ad revenue targeted for 2025, Netflix is no longer just a streaming service but an advertising powerhouse. The continued investment in original content and international markets will determine its ability to stay ahead of Amazon, Disney+, and Apple TV+, which are aggressively expanding their presence.

As the streaming wars intensify, Netflix’s ability to adapt to consumer demands, optimize monetization strategies, and leverage its global reach will define its long-term dominance in the entertainment industry.