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In a stunning development for the streaming industry, Netflix NFLX is on track to achieve a milestone that seemed unthinkable just a few years ago. According to exclusive research from Omdia, part of TechTarget TTGT, presented at MIP TV London 2025, Netflix is projected to surpass Alphabet GOOGL-owned YouTube in total video revenues for the first time in 2025, marking a watershed moment in the digital entertainment landscape.
Revenue Projections Signal a Power Shift
While YouTube dominated the market in 2024 with $42.5 billion in revenues compared with Netflix's $39.2 billion, the tables are turning. Investors have responded enthusiastically to Netflix's performance, with NFLX shares surging an impressive 59.7% in the past year, significantly outperforming tech giants like Apple AAPL, Amazon and Disney, as well as the broader Zacks Consumer Discretionary sector.
1-Year Performance
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Netflix is projected to generate $46.2 billion in 2025, outpacing YouTube's expected $45.6 billion. This remarkable shift underscores Netflix's successful dual revenue strategy, generating $43.2 billion from subscriptions while building a growing advertising segment worth $3.2 billion.
The Zacks Consensus Estimate for NFLX’s 2025 revenues is pegged at $44.43 billion, indicating 13.92% year-over-year growth. The consensus mark for earnings is pegged at $24.58 per share, indicating a 23.95% increase from the previous year.
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YouTube, despite its massive reach of more than 2 billion users globally, will derive most of its revenues from advertising ($36 billion), with its premium subscription tier contributing $9.6 billion. This contrasting approach highlights Netflix's advantage in monetizing content directly through its subscriber base, which is expected to exceed 340 million paying members in 2025, with its content reaching more than 600 million users worldwide.
Strategic Growth Drivers
Netflix's ascension isn't happening by accident. The company has methodically executed a two-pronged growth strategy, which includes expanding its global subscriber base while simultaneously developing its advertising business since its late 2022 launch. This approach has transformed what was once a pure subscription service into a diversified entertainment powerhouse. The company’s price-tiered strategy has effectively captured market segments that previously found Netflix unaffordable.
The results speak for themselves. In fourth-quarter 2024, Netflix reported that its ads plan represented over 55% of new sign-ups across markets where it's available, with membership on ads plans growing approximately 30% quarter over quarter. This rapid adoption has Netflix executives projecting to double ad revenues again in 2025, following similar impressive growth in 2024.
Beyond advertising, NFLX's strategic expansion into gaming, live events, and international content production has created multiple growth engines propelling the company forward. These investments are yielding significant returns as Netflix continues to grow its share of screen time globally, cementing its position as the entertainment destination of choice for hundreds of millions of viewers.
However, the company's forward 12-month sales multiple of 9.1 exceeds its five-year median of 6.79, indicating that the stock may be trading at a premium to its historical valuation. Moreover, this multiple surpasses the Zacks Broadcast Radio and Television industry's forward earnings multiple of 3.89, suggesting that Netflix's valuation is stretched relative to its peers.