Netflix’s Q2 results reflect many of the same trends uncovered in our 2025 Annual Streaming Study, from rising ad-supported tier adoption to early moves in live content. We break this down for you in a highlight of three critical areas where Netflix is leaning in, and where we believe the platform (and the industry) can go further.
Trend 1: Ad-supported tiers offer a release valve for subscription fatigue
While Netflix reported notable foreign exchange gains in Q2, two core growth drivers stood out: healthy member growth and rising ad sales. Underneath those numbers is a strategic shift that mirrors what we see in our data. The rollout of lower-cost, ad-supported tiers has helped alleviate the subscription fatigue many consumers were feeling in 2024.
These more affordable options are meeting consumers where they are. Our latest insights show that willingness to tolerate ads is rising, and with it, the likelihood that users will retain rather than cancel their subscriptions. Propensity to cancel has ticked down, and there is clear evidence of latent willingness to pay that platforms can still tap into.
This shift toward flexible monetization aligns with Netflix’s own prioritization of revenue quality over subscriber volume. “We’re focused on revenue and operating margin (not subscribers) as our primary financial metrics…” Netflix co-CEOs Ted Sarandos and Greg Peters wrote in a shareholder letter.
Key takeaway:
As subscriber growth levels off, long-term success will hinge on monetization flexibility, not blanket price hikes. Streaming leaders should focus on strategies that strengthen retention and drive incremental revenue through thoughtful tiering, ad-supported models, and differentiated content offerings.
Trend 2: Live events and gaming are smart bets for engagement
Netflix continues to deliver high-quality content, but at this point, excellence in core programming is expected. Content delivery alone no longer differentiates a platform. To unlock additional value and manage churn, Netflix is broadening its offering with live content and gaming. While these areas are not yet generating direct revenue, they are helping strengthen the platform’s relevance and prepare it for long-term monetization.
Our Study reveals growing consumer demand for both content types:
32% of consumers want access to live content through streaming platforms
36% say they would be more likely to subscribe if gaming were included
These figures show a clear opportunity to develop premium tiers tailored to specific interests. While ad-supported plans cater to more price-sensitive users, live sports and gaming could support higher pricing when packaged in a way that delivers clear and compelling value.
Netflix’s partnership with TF1 in France is one example of this strategy in motion. Beginning in summer 2026, French subscribers will gain access to TF1’s live linear channels and on-demand programming as part of their Netflix subscription. The content lineup will include soap operas, weekly competition shows, and high-profile sports like the UEFA Nations League. Although current live content viewership is around 2 million hours, demand has not yet reached the level needed to justify a standalone live package. This move reflects Netflix’s intent to learn what resonates and prepare to scale where appropriate.
Gaming is progressing along a similar path. While monetization is not yet the focus, Netflix is expanding its game library, building internal capabilities, and assessing how gaming fits within its broader strategy. The goal is to increase engagement today and establish a foundation for revenue generation in the future.
Our data from our Study shows a 12% year-over-year increase in consumer willingness to pay. This is a strong sign for platforms looking to accelerate monetization. It presents a clear opportunity to introduce content formats and premium experiences that deliver greater value to high-potential audience segments.
Key takeaway:
Live content and gaming may not be revenue drivers today, but they are clear avenues for future growth. By continuing to invest in these high-interest formats and refining how they are packaged, Netflix will be able to convert consumer demand into lasting monetization opportunities.
Trend 3: Competing for attention requires a shift toward short-form and shareability
Netflix’s Q2 shareholder letter notably omitted any direct mention of short-form video. While that may suggest a cautious stance, competitive signals across the streaming and digital media industry highlight an urgent need to evolve. Notably, in May 2025, Netflix began testing short-form content feed, indicating that the format is under consideration. This comes at a time when platforms like YouTube, TikTok, and Instagram are commanding a significant share of daily screen time, particularly among Gen Z and younger Millennials. These players are no longer peripheral; they are direct competitors. Our data reinforces this shift. Nearly 55% of consumers aged 18 to 39 years say they replace streaming time with social media. This represents a significant threat for platforms that fail to engage younger users early.
Success in the current market will be determined not only by what content is offered, but also by how seamlessly it integrates into users' daily viewing habits. Making content more accessible, mobile-optimized, and socially engaging is becoming essential to sustaining competitive advantage and capturing incremental audience share in a tightening attention economy.
Key takeaway:
Netflix is making a move in the right direction, but the competitive pressure from social-first platforms continues to build. Winning over the next generation of viewers will require more than strong programming. It will demand innovation in format, mobile-first delivery, and experiences designed to fit into the rhythms of everyday digital life. Platforms that prioritize how users consume, not just what they consume, will be best positioned to lead.
Now is the time to stop counting subscribers and start measuring their willingness to pay.
The most successful streaming platforms will be the ones that shift focus from chasing user growth to unlocking the full revenue potential of each subscriber. That means acting now by testing new pricing models, launching high-value add-ons, and refining segmentation strategies. The playbook has changed. Growth is no longer about who has the most users. It’s about who gets the most value from them.
Reach out to us to explore how you can turn subscriber value into your next growth engine. Let’s build a smarter monetization strategy together.