Second, she’s got broad entertainment experience, ranging from content licensing, distribution. She’s got business development, finance strategy at Netflix and in prior roles. So I think when you think about that assemblage of skills, and you think about the existing ads leadership team that we have that has got a rich, rich history in ads in general and connected TV, especially if you think about somebody like Peter Naylor, who started selling connected TV at Hulu. That’s a strong team to take our ads business to the next level. And maybe I’ll just – I want to maybe just restate what we think the promise and the opportunity and sort of where we’re at on ads business is. And so first of all, just starting off with – this is a $180 billion opportunity when you think about linear TV, you think about connected TV, not including YouTube, not including China and Russia.
And we think we’re in a great position to win some of those dollars. We’ve got great content. The brands want to be next to. We’re a safe place for brands to exist. We got great engagement from our members. That’s a really strong foundation to work with. But we got a lot of work, and we know we have a lot of work to fulfill that potential. Among that work, we’ve said it many times, I’ll say it probably many times going forward. But scale is the number one priority. We’re making good progress there. This quarter, we grew our ad plan membership 70% sequentially, quarter-to-quarter. That’s on top of the last quarter where we grew at 100% quarter-to-quarter. We now have 30% of our new sign-ups choosing our ads planned in our ads countries. And we’ve done it by making the ads offering more competitive.
We’ve gotten to over 95% content period with our non-ads plans. We’ve improved features like a number of streams, the video resolution. We’re going to keep doing that. We’re adding downloads now. So we’ll keep that good trajectory going and keep focusing on it. Second big priority for us is delivering features and products that advertisers want. We’ve heard again and again, I’ve heard it this week, a week from advertisers. Top of that list is measurement. We’ve launched our measurement partnership with Nielsen in the United States this month in October. So we’re excited about that. We’ve got a long list of other partners across other countries that we’ve got to deliver that same capability in. So we’re excited about getting that out. We’re also excited about new products.
So we’ve rolled out our top 10 media buy. We’re going to roll out our Binge ad product later this year. We’re launching more ways to buy programmatically through Microsoft that gives more buyers, more ways to access our inventory. So we’ve got a lot of work to do here on all of those fronts, but we’ve always said this is a multi-year build to multi-year progress. We’ve got a lot that we’ve got going on, and we’re excited about the future to come.
Jessica Reif Ehrlich: So now that you’ve phased out basic for new subs and you’re getting extra members or paid more per sub from password share and crackdown and you’ve introduced advertising in 12 countries. Could you talk about the outlook for ARM in 2024 and beyond?
Spencer Neumann: You guys want me to take that one?
Gregory Peters: Go ahead, Spencer.
Spencer Neumann: All right, you wind it up for me. Thanks, Jessica. So I would say just generally, when we think about 2024 and beyond, think about it as our revenue growth profile in general. And we talked about this recently. We expect a more balanced mix of membership and ARM growth in 2024 and beyond 2024. So just looking at 2024 specifically, as Ted talked about, we expect to have a great slate to drive the business forward. And we expect to continue to do things like add extra members, grow our advertising revenue, as Greg discussed. And in addition to have some pricing adjustments, you saw that in our letter, all those things will drive ARM. So 2023 was a pretty unusual year where essentially all of our growth came from member growth.
And going forward, more broadly, not just 2024 and beyond, we’ll grow our business by continuing to kind of improve our service, increasing engagement, increasingly satisfying current and future members. And now that, as Greg discussed, I know we’ve got an account sharing solution, we have a more clear path to more deeply penetrate that big addressable market of a half a billion connected TV households and growing. And with our continued plan evolution, pricing sophistication and all that hard work on our ads business, we’ll keep getting better at monetizing that big and growing reach and engagement. So we believe – we’ve got a long runway for growth in both kind of more membership and higher ARM over time in a more balanced way than what you saw this year, which was again a pretty unusual year.
Jessica Reif Ehrlich: And then you touched on, Greg touched on scale and advertising. How do you get to scale? Is it all through pricing, like pricing changes? And what would you consider scale?
Gregory Peters: Yes. I think it’s important to note that scale isn’t – it’s not a binary condition, right? So it’s not like you suddenly add one more member and you become a must buy situation. So we become increasingly competitive with increasing reach. It’s also, I think, worth noting that it’s different in different countries. And it’s largely based on what’s the competitive channels and what’s that competitive dynamic. So having said that, though, we carry several relevancy targets on a per country basis, think about this as essentially a percentage of market penetration that helps us focus and drive the rate of growth that we desire. And we’ve got more work to do to get those. So I mean like we’re not satisfied with the scale that we’re at in any country that we’re in.
We want to be bigger, and we know we can be bigger. I think there’s a variety of techniques that we can employ to do that pricing and thinking about how do we factor in what’s optimal pricing for ads, no ads. That’s part of what we’re doing and thinking about plan evolution. Part of it is what I mentioned before, which is feature set, right? These are the things that consumers want to sign up for. Part of it, too, is actually just educating consumers. I think what we are seeing is in some of our countries, consumers think about an ads experience mostly anchored in linear and what their expectation around ad load, frequency rates are. And to some degree, actually, some of our streaming competitors haven’t done maybe as great a job in building an ad experience, which informs that expectation as well.
The part of it is just educating consumers about what the actual Netflix ads experience is so that they can think about what’s the right choice for them. Do they want to lower price with ads and what we think is a great ads experience for consumers really, or do they want to pay more and skip ads. So it’s all those things coming together that ultimately drive us to the several multiples of scale that we’re at today that we’ll be satisfied with.
Jessica Reif Ehrlich: One last one maybe on advertising before we move on to margins. But you mentioned a lot of the innovative offerings that you plan on and some of it sponsors. It’s very unique. It’s different. When do we get to a point or when will you have a point where it’s targeted, addressable, so it’s really relevant for consumers. And so they would want to see the ads.
Gregory Peters: Yes. So we’re working with Microsoft right now on targeting, so you’ll see that roll out in the near future. And that, I think, is the first step of how we think about increasing targeting relevance through both a combination of product sets. So what are the types of ad products that brands can buy that yield increasing relevance as well as improving our sort of sophistication on what we might call targeting from a digital perspective, which is basically matching consumers who are most interested in that particular brand’s message.
