Netflix Could Hit $1 Billion A Year In Ads, If Business Model Changed

A report from Nomura Instinet says Netflix could pull in $1 billion in advertising a year — should the subscription video-on-demand service decide to alter its business model, according to Seeking Alpha, a content service for financial markets.

Netflix stock was virtually unchanged on Friday trading -- down 0.5% to $368.13.

For a long time, Netflix executives have been firm about their decision not to take advertising.

Recently at the Cannes Lions event, NBCU and Hulu ad executives predicted that ever-rising costs for production and acquiring content will almost assuredly push the digital streaming service to take on advertising.

For its part, premium digital video competitor Hulu -- which has both non-advertising and limited advertising consumer options -- is estimated to pull in some $1.85 billion this year in ad revenue, according to eMarketer.



Hulu said its ad revenue rose more than 45% in 2018, to nearly $1.5 billion. It has a total of 28 million U.S. subscribers.

Netflix is forecast to spend around $8 billion on original programming this year -- and around $13 billion overall. Both numbers will rise in the next few years.

Netflix has 60 million U.S. subscribers and around 140 million subscribers worldwide.

Analysts predict growing competition from new digital services from Walt Disney, NBCU and WarnerMedia might force Netflix to alter its business model.

1 comment about "Netflix Could Hit $1 Billion A Year In Ads, If Business Model Changed".
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  1. Ed Papazian from Media Dynamics Inc, July 1, 2019 at 8:32 a.m.

    Wayne, we will shortly release to our "TV Dimensions" subscribers our own estimates of what might happen if Netflix moved quickly on this and we come up with a considerably better picture, albeit based on assumptions which are clearly spelled out in our "Alert" report.

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