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Netflix ad revenue per subscriber narrowing, measurement firm says

The StreamSaver bundle introduced by Comcast offers Apple TV Plus, Netflix and Peacock at a low price. (Courtesy image)
The StreamSaver bundle introduced by Comcast offers Apple TV Plus, Netflix and Peacock at a low price. (Courtesy image)

Netflix’s blossoming advertising business is helping to retain customers who feel priced out of various cost adjustments made by the streaming service over the past few years, allowing them to continue to enjoy Netflix’s deeply-curated catalog of TV shows and movies at a lower price point if they’re willing to watch short commercial breaks.

That may be better for consumers than it is for Netflix’s bottom line.

According to new data from eMarketer, Netflix’s advertising revenue per ad-supported subscriber (a metric The Desk is calling AD-ARPU) is expected to drop from just over $70 per subscriber this year to slightly north of $59 per subscriber by 2026.

Despite the slowdown in revenue, Netflix is still forecasted to pull ahead of other general entertainment streaming services this year, including Hulu (around $43 AD-ARPU), Disney Plus (around $36 AD-ARPU) and Max (around $29 AD-ARPU).

Chart showing ad-arpu forecast since March 2024.
(Chart courtesy eMarketer, Graphic by The Desk)

While Netflix might claim the lion’s share of advertising revenue per subscriber, Hulu will have six times as many viewers watching content with ads, and Hulu’s connected TV advertising revenue will be four times larger than Netflix, according to eMarketer.

One reason? Hulu couples itself with two of Disney’s other streaming service — Disney Plus and ESPN Plus — and also retains sports-hungry subscribers with a live TV service that offers free access to the ad-supported tiers of all three video on-demand services.

While Netflix is offered as a bundle with other streaming services — Verizon’s Plus-Play marketplace offers Netflix as a bundle with at least one other service, while Comcast’s Stream Saver couples Netflix with Apple TV Plus and its own Peacock for $15 per month — all of these bundles exist outside of Netflix’s own ecosystem, while Disney controls all aspects of its bundles.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.

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