Netflix's head of ad sales departs amid strong earnings report
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Netflix confirmed Thursday that its VP of advertising, former Snap, Hulu and NBCU ad executive Peter Naylor, is departing the company after 18 months.
Why it matters: He's the second major ad executive to leave Netflix following the launch of its ad-supported tier in 2022.
- Former Amazon and Snap Inc. advertising executive Jeremi Gorman left Netflix last year.
- Gorman and Naylor were poached from Snap Inc. in mid-2022 to launch Netflix's ad business.
- Netflix executive Amy Reinhard replaced Gorman as advertising president in 2023. The company said it would hire a head of U.S. and Canada advertising executive to replace Naylor.
Zoom in: The news comes as Netflix says its ad business is beginning to grow meaningfully.
- Ad-supported tier signups now account for 45% of all signups in Netflix's ad markets last quarter, the company told investors Thursday.
- "Given this sustained progress, we believe that we're on track to achieve critical ad subscriber scale for advertisers in our ad countries in 2025, creating a strong base from which we can further increase our ad membership in 2026 and beyond. Our ad revenue is growing nicely and is becoming a more meaningful contributor to our business," it said.
Between the lines: In May, Netflix announced that it is building its own in-house ad tech platform to launch globally in 2025 after testing it in Canada this year.
- The company acknowledged to investors that building an ad business from scratch takes time, and that while it expects advertising to impact its revenue in the long term, "we don't expect advertising to be a primary driver of our revenue growth in 2024 or 2025."
Zoom out: Shares in Netflix ticked up Thursday after the company said it added 8.05 million net paid customers last quarter, beating analyst estimates and bringing its global paid subscriber total to 277.65 million.
- The firm also beat Wall Street expectations on its top and bottom lines.
The big picture: The company also touted growth in live programming, including its Christmas Day NFL games last year and the WWE matches coming in 2025, as well as continued investments in gaming.
The intrigue: Netflix swiped at its peers, who are looking to bundle their services to achieve scale.
- The company said it hasn't bundled its service solely with other streamers "because Netflix already operates as a go-to destination for entertainment thanks to the breadth and variety of our slate and superior product experience. "
What to watch: Netflix's earnings report often serves as a bellwether for broader trends impacting other streamers which will unveil their earnings results in the coming weeks.
