ARPU

Explanation

ARPU (Average Revenue Per User) is a financial metric calculated by dividing total subscription and advertising revenue by the number of subscribers over a given period. For streaming services, ARPU is a core indicator of monetization efficiency. Netflix US ARPU was approximately $17 in 2024 — significantly higher than its international ARPU of around $8, which reflects lower subscription prices in price-sensitive markets. The introduction of ad-supported tiers complicated ARPU calculations: a subscriber paying $7/month on an ad-supported plan may generate higher total ARPU than a $15 ad-free subscriber if ad revenue per user is high enough. Services with high ARPU can invest more in content per subscriber. ARPU is also used to compare streaming services — a service with 50 million subscribers and $15 ARPU generates more revenue than a service with 80 million subscribers and $6 ARPU.