Netflix Sees Surge in Ad Commitments Thanks to NFL and Squid Game

Netflix reported a significant increase of over 150% in upfront ad commitments for this year. This boost is partly due to the arrival of National Football League (NFL) games on the streaming platform on Christmas Day.

In just its second year of upfront negotiations, Netflix has succeeded in securing advertising deals with all major holding companies and independent agencies. These negotiations are crucial as networks and media companies aim to lock in ad commitments for future shows.

The company, based in California, has secured partnerships for various high-profile properties. Among these are the popular series “Squid Game” and “Wednesday,” along with the upcoming movie “Happy Gilmore 2.” Netflix has also closed deals for live events, such as WWE Raw and the NFL games set for Christmas Day.

The competition in the streaming space is becoming increasingly fierce. Major players like Warner Bros Discovery’s Max and Walt Disney’s Disney+ are also leaning towards ad-supported plans and streaming bundles to drive growth.

Streaming services are investing heavily in sports content to attract a broader, younger audience. This strategy aims to lure more advertisers who are willing to pay for premium live sports content.

Netflix is facing a saturation point in subscriber growth in the United States. As a result, they are ramping up their advertising business, although this is not expected to become a significant revenue driver until at least 2026.

Last month, the company reported that its ad-tier membership grew by 34% sequentially in the second quarter. This growth is a part of Netflix’s ongoing efforts to diversify its revenue streams.

In November 2022, Netflix introduced an ad-supported tier to help offset the rising costs of creating original content and licensing deals that are essential to keeping viewers engaged. By May, the cheaper, ad-supported plan had reached 40 million global monthly active users.

Source: Reuters