Netflix’s NFL Games Through 2026 Set To Drive Explosive Subscriber, Ad Revenue Growth, Says Analyst

Surbhi Jain | May 16, 2024

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Netflix Inc. (NASDAQ:NFLX) is gearing up for a game-changing move that could significantly boost its subscriber base and ad revenue: the acquisition of rights to NFL games on Christmas Day from 2024 to 2026.

This bold step, coupled with the company’s successful ad tier growth and upcoming ad tech improvements, underscores Netflix’s commitment to diversifying its content offerings and expanding its reach in the competitive streaming market.

The Netflix Analyst

JPMorgan analyst Doug Anmuth reiterates an Overweight rating on Netflix stock, with a price target of $650.

Also Read: Netflix To Stream 2 NFL Christmas Day Games: Analyst Sees Strong Growth Potential

The Netflix Thesis

The company is making strategic moves that could significantly benefit investors, according to Anmuth. The company’s recent announcements indicate a positive outlook for the stock, with potential for growth in both subscriber numbers and ad revenue. They’re seen as positive drivers for future growth.

The NFL Games’ Streaming Potential

One of the key developments is Netflix’s acquisition of rights to NFL games on Christmas Day from 2024 to 2026. This move is expected to drive subscriber growth and increase ad revenue, as NFL games have a highly engaged global audience. Last year’s NFL Christmas games were among the top 25 most viewed TV programs in 2023, highlighting the potential of this partnership.

Ad Tier Supported By 40M MAUs

According to Anmuth, Netflix’s advertising tier is also performing well, with 40 million monthly active users (MAUs). This is at the high end of expectations and suggests strong interest in the ad-supported model. The ad tier comprises 40% or more of sign-ups in advertising markets, indicating its popularity among users. Additionally, ad tier members are highly engaged, with 70% or more viewing content for at least 10 hours per month.

Shifting Gears In Ad Tech Monetization

In terms of ad tech, Netflix is making improvements to its platform to drive more meaningful ad revenue in 2025. The company plans to create an in-house ad tech platform and expand its buying capabilities to include The Trade Desk (TTD), Google’s Display & Video 360, and Magnite, alongside Microsoft’s Xandr, starting this summer. These developments should support deeper monetization of Netflix’s advertising inventory, the analyst says.

Investors should keep an eye on Netflix’s continued efforts to expand its ad-supported offerings and enhance its ad tech capabilities, as these could be key catalysts for the stock going forward.

NFLX Price Action: Netflix stock closed the day lower by 0.02% on Wednesday, at $613.52 a share.

Read Next: Netflix Says In-House Ad-Tech Coming: The Trade Desk And Magnite Shares Climb

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