Netflix is projected to surpass Disney+ in US ad revenue by 2024, says report

Netflix to Outpace Disney+ in U.S. Advertising Race

December 12, 2023 – 3:10 AM PST

According to an Insider Intelligence⁤ report, Netflix is projected ⁤to ‌surpass Disney+‍ in the competition for U.S. advertising dollars next year. The report⁤ reveals that price increases and a‍ crackdown ‍on password-sharing will attract more viewers to Netflix’s ad-supported plan.

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The‌ report,⁢ exclusively shared⁣ with Reuters, indicates that Netflix’s ad revenue is expected ​to increase by 50.3% ⁣to approximately $1 billion next year.

Meanwhile, Disney+ is predicted to experience a 16.1% rise in⁣ revenue from ⁣commercials, reaching around $912 million in ​2024. However, Disney+ will end this year with approximately $100 million more in⁤ ad sales compared to Netflix.

This forecast ‍highlights the success of Netflix’s crackdown on password-sharing,⁤ which contributed to the ⁤addition of nearly 9 million subscribers in the September quarter. The ad-supported plan accounted for almost a third ⁣of these sign-ups.

In October, Netflix also⁢ raised the‌ prices of its commercial-free plans to encourage more customers to opt⁤ for the cheaper ad-supported offering, which⁢ was introduced in November last year at a cost of about $7 ​per month.

Netflix has been ‌able to sell⁢ ads ‌at a slightly higher price than its competitors by ⁣capitalizing⁣ on‌ the⁤ pent-up ​demand from advertisers who⁢ had ‌been⁣ waiting ‍for its ‍ad-supported⁢ option for years, according to Insider Intelligence analyst Ross Benes.

“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,” said Benes. He added, “Disney⁤ is struggling more right now because⁣ they⁢ have had all these​ box​ office bombs.”

However, the report suggests that Disney could narrow the gap by increasing the adoption of its ad-supported plan and merging Disney+ and ⁣Hulu into one ⁤app.

Currently, ‌about 5% of Netflix’s U.S. subscribers are shown commercials, while the figure ‌is 17% for Disney+. Next year, it is expected‌ to rise to approximately a fifth of Disney’s subscribers and ⁢a slight growth to 7.5% for ⁢Netflix.

“Disney is betting a lot of the future of the ‌company on this streaming service, and advertising has always been a key part of⁢ it. They need⁢ to get more‍ people​ on the ad ⁤plan,” the report stated.

Reporting by Chavi Mehta in Bengaluru; Editing by Sriraj ⁢Kalluvila

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Netflix is set to pull ahead of Disney+ in the​ race for U.S. ⁢advertising dollars next year ‌as price​ hikes and a password-sharing crackdown pull more ⁤viewers to its ad-supported ⁤plan.

Microsoft and‌ the AFL-CIO union‍ federation said they ‌had struck⁢ a ​deal whereby the software giant will remain neutral ⁤in ⁢efforts ⁤by unions to encourage workers to become members.

Amazon.com asked a federal ⁤court to dismiss a U.S. ⁤government antitrust lawsuit⁢ which accuses the company​ of using illegal strategies to ‍boost ​profits at its online retail ⁢empire.

More than 10 ⁢million⁤ people have signed ‌up for ⁢X in December, X CEO ​Linda ⁣Yaccarino‍ said in a post on the social media platform.

How⁣ does Netflix’s competitive advantage, such as selling ads at⁣ a higher price and higher viewer engagement, position it ⁢for significant ad revenue growth compared to Disney+

Edited by Jacqueline Brasinikas

Title: Netflix Set to Surpass Disney+ in U.S. Advertising Competition

Introduction

Streaming giants Netflix and Disney+ have been engaged in a fierce battle for dominance in the U.S. streaming market. However, a recent report ‍by Insider Intelligence underscores Netflix’s projected success in outpacing Disney+ in the race for advertising dollars. This article will delve into the factors contributing to Netflix’s expected lead in ad revenue, including price increases and a crackdown on password-sharing.

Netflix’s Expected Ad ​Revenue Growth

According to the exclusive report shared with Reuters, Netflix’s ad revenue is ​anticipated to climb by ‍50.3% to reach approximately $1 billion in ‍the coming year. This substantial growth reflects ‌the success of Netflix’s strategies to attract more ad-supported subscribers, resulting in increased advertising‍ revenue.

Disney+’s Projected Ad Revenue Growth

On the other hand, Disney+ is predicted to experience a 16.1% rise in revenue from ‌commercials,‌ reaching around $912 ⁢million in 2024. Despite this growth, Disney+ will end this year with approximately $100 million⁣ more in ad sales when compared to Netflix. However, Netflix’s recent efforts have positioned it favorably to close this revenue gap.

Crackdown on Password-Sharing and Increased Prices

Netflix’s crackdown on⁢ password-sharing has played a significant role in the platform’s success. This initiative has attracted nearly 9 million subscribers in the September quarter alone, with⁢ the ad-supported plan accounting for a significant portion of these sign-ups. This move has not only contributed to a surge in subscriptions but has also paved the ​way for increased ad revenue.

Additionally, Netflix raised the⁤ prices of its commercial-free plans in ‍October, prompting more customers to opt for the cheaper ad-supported offering introduced in November last year. This⁢ strategic pricing structure has ⁤successfully attracted new subscribers ‌and bolstered the growth of ad revenue.

Netflix’s Competitive Advantage

Netflix has been able to sell ads at ‌a slightly​ higher price than its competitors due to the pent-up demand from advertisers who had been waiting for its ad-supported option for years. This⁤ advantage, coupled ‍with the fact that viewers⁣ spend more time per day with​ Netflix than with other streaming services, positions Netflix for significant ad revenue growth.

Challenges for Disney+

The report highlights Disney’s struggles due to recent box office disappointments. With several⁤ underperforming movies, Disney has faced setbacks that have impacted its‍ ability to generate revenue and attract advertisers. To counter these challenges, the report suggests that Disney ​could narrow the ⁢advertising revenue gap by increasing the adoption of⁢ its ad-supported plan and​ merging Disney+ ⁤and Hulu into one app.

Projected‌ Subscriber Figures

Currently, approximately 5% of Netflix’s U.S. subscribers are shown commercials, while this figure stands at 17% ‍for Disney+. However, next year, a rise to approximately a fifth of Disney’s subscribers is expected, ​with a ‌slight growth to 7.5% for Netflix. These⁣ projected figures highlight ⁣the potential for ‍increased advertising revenue for both platforms.

Conclusion

In ⁤the battle for U.S. advertising dollars, Netflix’s strategic moves, including a⁣ crackdown on password-sharing and price increases, have ⁢positioned it ahead of Disney+. With substantial growth projected⁢ in ad revenue, Netflix is set to outpace Disney+ in this competitive arena. Nonetheless, Disney⁢ has⁣ a ⁤plan to bridge the gap by increasing the ⁢adoption of its ad-supported ‍plan and consolidating its streaming services.⁢ The coming year will prove crucial in determining the ultimate winner of the U.S. advertising race within the streaming industry.



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