Netflix to squeak past Disney+ in US advertising revenue in 2024: report
NETFLIX is set to pull ahead of Disney+ in the race for US advertising dollars next year as price hikes and a password-sharing crackdown pull more viewers to its ad-supported plan, an Insider Intelligence report projected.
The streaming pioneer’s ad revenue will likely jump 50.3 per cent to about US$1 billion next year, the report – exclusively shared with Reuters – showed.
Walt Disney’s Disney+ is expected to post a 16.1 per cent rise in revenue from commercials to about US$912 million in 2024, though the service will end this year with about US$100 million more in ad sales than its rival.
The prediction underscores the success of Netflix’s password-sharing crackdown, which helped add nearly nine million subscribers in the September quarter, with the ad-tier accounting for nearly a third of the sign-ups.
The company also raised prices of its commercial-free plans in October to nudge more customers to the cheaper ad-supported offering, rolled out in November last year for about US$7 a month.
Netflix has been able to sell ads at a slightly higher price than rivals by leveraging the pent-up demand from advertisers who had been waiting for its ad tier for years, Insider Intelligence analyst Ross Benes said.
A NEWSLETTER FOR YOU
Lifestyle
Our picks of the latest dining, travel and leisure options to treat yourself.
“Because viewers tend to spend more time per day with Netflix than with other streaming services, Netflix’s ad revenues are poised to grow significantly,” Benes said, adding that “Disney is struggling more right now because they have had all these box office bombs.”
However, Disney could soon narrow the gap on the rising adoption of its ad tier and the combining of Disney+ and Hulu into one app, the report said.
About 5 per cent of Netflix’s US subscribers are currently shown commercials, compared with 17 per cent for Disney+.
The figure is expected to rise to about a fifth of subscribers for Disney next year, while Netflix will likely see a slight growth to 7.5 per cent.
“They’re (Disney) betting a lot of the future of the company on this streaming service and advertising has always been a key part of it and so they need to get more people on the ad plan.” REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Lifestyle
Former Zouk morphs into mod-Asian Jiak Kim House, serving laksa pasta and mushroom bak kut teh
Massimo Bottura lends star power to pizza and pasta at Torno Subito
Victor Liong pairs Aussie and Asian food with mixed results at Artyzen’s Quenino restaurant
If Jay Chou likes Ju Xing’s zi char, you might too
Mod-Sin cooking izakaya style at Focal
What the fish? Diving for flavour at Fysh – Aussie chef Josh Niland’s Singapore debut