Analyst: Disney Plus, Netflix could generate $1 billion each in ad revenue by 2025

The devil will be in the details of how each company prices these new offerings and how much of the available content impressions will be available and suitable for advertising, said analyst Michael Nathanson

By TVBEurope Staff

Published: June 15, 2022 Updated: June 16, 2022

The devil will be in the details of how each company prices these new offerings and how much of the available content impressions will be available and suitable for advertising, said analyst Michael Nathanson

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Disney Plus and Netflix could generate $1.8 billion and $1.2 billion resepctively by 2025 according to figures from analysts MoffettNathanson.

Netflix has the potential for much larger global ad growth, yet the domestic advertising opportunity for Disney Plus appears greater, said Michael Nathanson in a note to investors, adding that Disney Plus can take advantage of a more-developed advertising infrastructure, demand for Disney content and Disney's ownership of a large share of that content.

While we are excited by the opportunity that advertising creates at those two streaming giants, the devil will be in the details of how each company prices these new offerings and how much of the available content impressions will be available and suitable for advertising, added Nathanson. In general, we feel that the growth of these ad offerings will be mainly sourced by non-sports and news linear cable and broadcast network dollars.

Netflix with ads could launch this year

Disney Plus to launch ad-supported subscription offering

In making his calculations, Nathanson said he expects Netflix to price its ad tier at $6 per month in the United States, or $4 less than its lowest-cost ad-free tier. He expects that by 2025, Netflix will have 15 million subscribers for its ad-supported tier in the US. and 75.6 million subs overall. Netflix subs opting for ads will get six 30-second commercials per hour.

Nathanson predicts Disney Plus will charge $7.99 per month for its ad-supported tier at the outset, raising its ad-free price to $11.99 a month. (The unbundled ad-free version currently costs $7.99.) By 2025, he sees Disney Plus having 37.1 million ad-supported subs out of 53 million total. Those subs will see five 30-second spots per hour.

In terms of profitability, Netflix will have to invest in its ad business, while Disney is more ready to go right away.

LINK:	https://www.tvbeurope.com/business/analyst-disney-plus-netflix-could-g...
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