Netflix Shares Gain On 150% Plus Rise In Upfront Ad Sales Commitments

(RTTNews) - Netflix Inc. shares gained around 2 percent, reaching its highest value in three years, after the streaming video giant disclosed more than 150 percent increase in upfront ad sales commitments in 2024 compared to 2023, in line with expectations.

In a statement, the Los Gatos, California-based company said it closed deals with all major holding companies as well as independent agencies for its second year of Upfront negotiations. Upfront commitments include investments from all key categories like CPG, Tech & Entertainment, Auto, QSR, and Retail.

The company further said its proposed in-house advertising technology platform will be tested in Canada in November and launched globally in 2025.

Netflix earlier had stated that advertising was not considered a primary driver of its revenue growth in 2024 or 2025, but a key component of its longer-term revenue and profit growth.

The company said, "Over the last few months, we've hit great milestones for our ads business.... We'll continue to improve the Netflix ads plan to ensure our members are delighted by the experience while simultaneously creating solutions that deliver results for our marketers, putting brands at the center of the best shows and films in the world, to a highly valuable and engaged audience."

Netflix said it closed partnerships for a number of upcoming films and series. These include fan-favorites Squid Game, Wednesday, Outer Banks, Happy Gilmore 2, Ginny & Georgia, and Love is Blind as well as deals around highly anticipated live events including WWE Raw, and the Christmas Day NFL games.

As announced in May, Netflix's new in-house ad technology platform will give advertisers new ways to buy, new insights to leverage, and new ways to measure impact.

Marketers can now set up private 1:1 marketplace deals directly with Netflix through The Trade Desk, Google's Display & Video 360, or Xandr. Further, the company said it is working to extend the capabilities across different buy types including programmatic guarantee in November.

The programmatic private marketplace buys are currently available in the US, Canada, Brazil, and Mexico, and will be extended more globally in the following months, the firm noted.

In May, the company had said that its ad-supported plan has 40 million global monthly active users, up from 5 million a year ago. Over 40% of all signups in the ads countries now come from the ads plan.

In mid July, Netflix announced that it phased out its basic ad-free streaming plan in the United States and France on the success of its ad-supported offering. The move came as solid growth in its global memberships and strong second-quarter results benefited the streaming media major to issue significantly positive third-quarter outlook and to hike fiscal 2024 revenue and margin view.

The company also said then the sustained progress indicate that it was on track to achieve critical ad subscriber scale for advertisers in its ad countries in 2025, creating a strong base from which it can further increase ad membership in 2026 and beyond.

According to Nielsen, over the last three years, Netflix had more top 10 titles than every other streaming service combined.

On Nasdaq, Netflix shares gained 1.5 percent on Tuesday's regular trading to close at $698.54.