JPMorgan Bullish on Netflix's Ad Growth Amid Trademark Enhancements
Sep/18/2024
JPMorgan maintains its optimistic view on Netflix, reaffirming an Overweight rating with a $750 price target as the company strengthens its position in the advertising market. Netflix’s ad-supported tier, which now accounts for over 45% of new sign-ups in regions where it is available, is expected to drive substantial growth. By 2025, the platform is projected to reach 42 million ad-tier subscribers, translating to 91 million Monthly Active Users. Though the ad tier currently exerts downward pressure on Netflix’s average revenue per member, JPMorgan anticipates that ad revenues will comprise more than 10% of total revenue by 2027, as Netflix fine-tunes its in-house advertising technology and pursues strategic partnerships to boost monetization. In parallel with its advertising progress, Netflix has extended its trademark portfolio. In August, the company filed a series of trademarks in the U.S., covering a wide array of products such as power adapters, downloadable entertainment software, virtual reality hardware, and consumer goods like mobile accessories and printed books. This trademark enhancement signals Netflix’s strategic move to diversify its offerings beyond streaming, tapping into various product categories and digital experiences. These developments in both advertising and trademarks position Netflix to solidify its influence across entertainment and technology sectors. Chart below shows Revenue generated by Netflix worldwide in 2023, by region, and additional visualisation shows recently filed Netflix trademarks.
