🍿 REVIEWS News – Paris/France.
© Reuters. $8,5 billion in ad revenue for Netflix stock?!
Advertising is the order of the day for Netflix (NASDAQ: ) (NASDAQ: NFLX) stock! Well, not as far as the Streaming. But this is the case when it comes to the strategic direction of your own growth story. We know that the management wants to rely in the future on a partially ad-supported business model. A lower price and the fact that you see a little advertising in between should help increase the number of users again.
The first details have meanwhile leaked. For example, Netflix wants to get ahead of Walt Disney (NYSE 🙂 and therefore aims for an earlier launch. But also details that affect the monetization itself. The company of Streaming is aiming for $65-80 per 1 views. Not a bad value, but rather a concrete key figure in monetization. And does not measure the possible turnover.
Other analysts have done the math and considered what overall digital advertising could mean for Netflix stock. The figure of 8,5 billion US dollars is in the room. But it definitely needs more context.
Netflix stock: $8,5 billion from ads? ! According to a Yahoo Finance report, Macquarie analyst Tim Nollen wrote to his own clients that they saw potential for billions in sales. Shares of Netflix could have a potential total of $3,6 billion in the US domestic market and Canada by 2025. Overall revenue could then climb to $8,5 billion worldwide .
For the analyst, that means there is a possibility of $2,1 billion in revenue. It would be interesting to know what specific calculation this is based on. Unfortunately, there is no more concrete idea at this stage. Only the statement that Netflix stock management is aiming for higher prices in terms of advertising. However, these prices can be justified by redirecting them to a more specific target group.
This could be a hint that Netflix may be drifting towards more personalized advertising. This means that there could be a selection process or a technical solution that compares the target group of the respective content with the advertising inventory. If successful, digital advertising could be a smash hit. Maybe even despite the higher costs.
An interesting prediction! If the predictions for Netflix shares come true, the revenue potential would be enormous. Ultimately, we see a potential billion dollar market, highly fragmented and dependent on viewers and the amount of content being streamed. There is also a bit of cyclicality. Or even seasonality, when viewers in Streaming may look less during hot summer months.
Nevertheless: it is a big step and it can be a success for the society of Streaming. Apparently, it won't be long before this format and the offer starts.
Vincent owns shares in Netflix and Walt Disney. The Motley Fool owns shares and recommends Netflix and Walt Disney and recommends the following options: $145 long call in January 2024 on Walt Disney and $155 short call in January 2024 on Walt Disney.
Motley Fool Germany 2022
This article first appeared on The Motley Fool
SOURCE: Reviews News
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