The streaming wars have always been about subscribers, until suddenly they were about advertising. Netflix, which spent years insisting it would never run commercials, is now chasing $3 billion in ad revenue for 2026 — roughly double what it collected last year — and still finding that investors can be difficult to please.
In its second-quarter shareholder letter, the company confirmed that its advertising tier continues to gain traction, accounting for more than 60 percent of new sign-ups in markets where it is available. The advertiser base has grown more than 70 percent year over year, to more than 4,000 clients. By most measures, this would qualify as progress.
(Wall Street, as is its custom, wanted faster progress.)
The more consequential news for media buyers may be on the access side. Netflix expanded programmatic buying this summer to include pause ads and live inventory, reducing the manual effort that has historically kept mid-sized advertisers on the sidelines. For agencies managing clients without Super Bowl budgets, this represents a meaningful shift — the digital equivalent of finally getting a table at a restaurant that used to require knowing someone.
Live programming, meanwhile, continues to punch above its weight. It accounts for only about 1 percent of viewing hours and roughly 5 percent of content spending, yet live events have driven six of the top 10 sign-up days in the last five years. Netflix executives have apparently noticed this math.
Greg Peters, the co-chief executive, said the company is still considering a free, ad-supported tier in some international markets, though he offered no timeline. The company is also expanding inventory through video podcasts and vertical video feeds, which is the sort of sentence that would have made no sense in the Netflix of 2015.
The streamer that once defined itself by what it would not do is now doing most of it.
Original story published in campaignlive.com: "Netflix says ad business on track for $3bn this year, but investors punish stock | Campaign US"