For a new advertising-supported option, Netflix could hit levels near Hulu's -- with advertising revenue per subscriber of around $13.30 per month from a possible 19 million U.S. subscribers, according to Ampere Analysis.
Using this data, Netflix could see its advertising option get to roughly a gross estimate of more $3 billion per year in ad revenue.
Guy Bisson, executive director and co-founder of media, entertainment and communications analytics company Ampere Analysis, estimates that Netflix subscribers for its ad-supported option could mostly be coming from current Netflix subscribers -- most of whom love the service, called "promoters" -- as well as a smaller group that is less thrilled with the subscription video-on-demand platform, called "detractors."
“Detractors could be persuaded to stay on platform if given an ad supported option,” he said, in an email to Television News Daily. He added: “Not all detractors will churn and not all ad-tolerant promoters will downgrade.”
Of the total 38 million Netflix "most important" promoter subscribers, he says, a little less than half of them -- 16 million -- could be convinced to move to an ad-supported option.
Another three million could come from so-called Netflix "detractors" -- those who aren’t always positive about service "but don’t mind watching advertising," says Bisson. In all, Netflix detractors make up an estimated 12 million U.S. subscribers.
Bisson says these projections come from research results derived from a Netflix survey.
Currently, there are around 66 million U.S. Netflix subscribers and another nine million or so coming from Canada.
"Assuming Netflix can achieve a similar ad income level to Hulu the impact of 'promoters' downgrading will be minimal with the net benefit being the retention of several million ‘detractors’ otherwise at high risk of churn," he says.
This potential annual advertising revenue level for Netflix would be comparable to other industry estimates.
Earlier this month,Television News Daily reported a Havas Media projection of between "$2 billion to $3 billion" in yearly advertising revenues, according to analysis by Jason Kanefsky, managing partner of marketplace intelligence.
He says this could come from $100 to $150 per year in advertising revenue per subscriber. He believes 20% of the 100 million North America subscribers (including password-sharing homes) could move to a Netflix advertising video-on-demand (AVOD) platform.