News

J.P. Morgan: Netflix to Generate $2.7 Billion in North American Ad Revenue by 2026

Netflix is set to launch an ad-supported subscription streaming VOD option before the end of the year. New data from JP Morgan contends the new pricing plan could generate upwards of $2.7 billion in incremental revenue by 2026 in the U.S. and Canadian markets combined.

J.P. Morgan analyst Doug Anmuth, in a note to clients, believes Netflix’s ad-supported subscription tier could generate 7.5 million subscribers through 2023, generating around $600 million in incremental revenue. That sub tally could reach 22 million subscribers by 2026, generating about $2.65 billion in sales. The analyst said the ad-supported subscribers would reflect a 19% incremental growth in North American subs. Others suggest Netflix’s lower-priced ad-supported tier would cannibalize its existing ad-free subscriptions.

“The [North American] ad-supported tier could generate overall revenue of $1.15 billion in 2023 and $4.6 billion in 2026, including incremental revenue of $350 million in 2023 and $2.3 billion in 2026, which would drive 2% upside to our current 2023 estimates and 13% upside to 2026,” Anmuth wrote.

Last month, The Wall Street Journal reported that Netflix was telling advertisers that it expects to generate 40 million ad-supported viewers by the third quarter of 2023, including 13.3 million viewers in the U.S.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Specifically, the streamer is eyeing 4.4 million ad-supported viewers globally by the end of 2022, including 1.1 million in the U.S.

Evercore ISI analyst Mark Mahaney contends that Netflix’s ongoing price sensitivity among its subscribers portends to a strongly favorable response to ad-supported streaming.

“We believe the global streaming market remains attractive,” Mahaney wrote in a note. “Netflix is the proven market leader, its management team is highly experienced and has a strong vision and execution record. The business model has proven its operating margin leverage and is in the process of generating substantial (free cash flow). There is a clear catalyst on the horizon, and valuation is intrinsically attractive.”

Netflix reports third-quarter fiscal results (ended Sept. 30) Oct. 18.

One thought on “J.P. Morgan: Netflix to Generate $2.7 Billion in North American Ad Revenue by 2026”

  1. IT’S A GOOD THING that I cancelled my subscription to NETFLIX because of all their PERVERTED videos toward children.

Leave a Reply

Your email address will not be published.

2 × two =

This site uses Akismet to reduce spam. Learn how your comment data is processed.