Netflix stock ( NASDAQ:NFLX ) investors have had a miserable year. A rapid drop in paying customers has significantly impacted the company, which has lost more than 60% of its value thus far in 2022. However, the streaming behemoth might experience a significant reversal in its fortunes sooner rather than later.
Netflix said earlier this year that it intends to add an ad-supported subscription option to its current levels . The plan was supposed to go live in 2023, but sources indicate that Netflix may have accelerated the timeframe to stem customer losses. The ad-supported tier is expected to be available as early as November 1.
Netflix Stock: An ad-supported strategy might be a game changer.
Anmuth expects that 7.5 million users in the United States and Canada will choose the ad-supported plan by 2023, generating $600 million in advertising income for Netflix. While this would be a modest fraction of Netflix’s top line, considering the company’s $31 billion in sales over the previous 12 months, ad income is likely to increase significantly in the long term.
According to the JPMorgan analyst, the ad-supported plan would generate $2.65 billion in ad income by 2026 due to a stable user base of 22 million . Globally, the figures are projected to be significantly higher. Netflix anticipates that it will have 40 million ad-supported users worldwide by the end of 2023, up from 4.4 million in 2022. Meanwhile, market research company Omdia predicts that by 2027, 60% of Netflix’s worldwide user base will be on an ad-supported tier.
After five years, the corporation may make 14% of its w...
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