Netflix is a beautiful case study on how to turn a business around.

After years of rejecting ads on its platform, the company pivoted in 2022 – and you can see the immediate return on that investment on the chart below.

The ad-supported tier significantly contributed to Netflix's revenue, marking a 12.5% increase in sales to $8.83 billion in the fourth quarter following the launch.

Last quarter, this tier accounted for 40% of all Netflix signups in the markets where it was offered.

LikeFolio data confirms continued traction in NFLX’s ad supported level.

While generic mentions of new Netflix subscriptions have risen by +2% YoY among english speakers, those talking about signing up for the ad-supported model specifically have risen by +47% YoY.

This is helping to lift NFLX above peers like Hulu and Disney+, even though the company already held significant market share.

Web visit growth/decline show this expansion in action for Netflix.

The Street is on to Netflix’s success.

The company received a slew of upgrades over the last week based on the premise that not only is the ad-tier driving growth, but it has become an anti-churn mechanism.

We’ll be listening in real-time to confirm if this is in fact the case.

Netflix shares have more than doubled over the last year, so continues overperformance is expected.