Ads on Netflix may boost U.S. revenue by 21% - report
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Netflix's (NASDAQ:NFLX) push toward an advertising-supported streaming video offering could bring a 21% boost to U.S. revenues, The Information says, based on the results so far from the rivals that Netflix is following into the ad-supported video on demand space.
That's considerable: Those U.S. revenues had risen about 10% year-over-year to $3.35 billion (up about 1.2% from the previous quarter) in Netflix's last earnings report.
Exactly how much extra revenue it brings yet depends on a few factors to be decided - just how many ads it plans to show, and exactly what the price will be: Netflix now charges $15.49/month for its standard domestic plan, with a $9.99/month basic plan and a $19.99/month premium plan, after its last U.S./Canada price hike.
And on ad load, there are a few approaches from rivals that Netflix can look to: On one end, there's Hulu (DIS) (CMCSA), known for running more ads than competitors and thus chalking up some more average revenue per subscriber. Then there's other recent entries into the AVOD world, like HBO Max (WBD) - treading carefully with HBO's old ad-free brand identity, and running ads to the low side.
In any case, we should know the answers sooner than expected: After famously dismissing the idea of ads on Netflix for years, founder Reed Hastings said volume and profit potential would phase in over a couple of years on the last earnings call, and the company is reportedly telling employees the rollout should begin in the last quarter of 2022.