Netflix’s stock surged to an intraday record of $711 per share on Tuesday, surpassing its previous high of $701 set in 2021. The streaming giant’s shares closed just below $692, driven by strong momentum in ad sales and potential price increases.
Netflix recently announced a “150% plus increase” in upfront ad sales commitments compared to 2023, bolstered by upcoming releases like “Happy Gilmore 2” and “Squid Game 2,” and the acquisition of live sports content, including NFL Christmas Day games and WWE Raw, starting in January 2024.
Amy Reinhard, President of Advertising at Netflix, highlighted the excitement among advertisers such as LVMH, Amazon, Hilton, L’Oreal, and Google, for the platform’s engaged audience and diverse programming. Netflix plans to launch its global in-house ad tech platform in 2025.
Analysts also anticipate a price hike for Netflix’s Standard plan, which could take effect in December, given the company’s increased investment in sports content. The last price increase for the Standard plan was in January 2022, raising the cost to $15.49 per month.
The ad-supported plan, introduced less than two years ago at $6.99 per month, remains one of the most affordable options in the market. Netflix aims to grow its ad business significantly by 2025, phasing out its lowest-priced ad-free plan to make the Standard plan its cheapest ad-free option.
Jefferies analyst James Heaney predicts that Netflix’s foray into sports, combined with its crackdown on password sharing, will drive subscriber growth and justify a year-end price increase. The company reported a 34% quarter-on-quarter growth in ad-tier memberships in its latest earnings, reinforcing its strategy to scale its ad business by 2025.
