In the past two years, Netflix has made some crucial changes in its plans and strategies. After facing a massive loss in subscribers, they decided to try new models to prevent more damage. But this certainly did not come easy, as these decisions did not sit well with most subscribers. When they announced advertisements would become part of the company’s business model, users did not sit quietly. People took to social media and threatened to leave the platform forever.

Despite all the backlash the streamer received, it has come out successfully in the end.

Netflix ads bringing in the big bucks

Netflix’s advertising tier has turned out to be a success, leading to analyst upgrades and a higher price target. Oppenheimer analysts increased their price target for Netflix’s stock to $600, the highest on Wall Street, thanks to the roaring success of its new advertising-supported tier. As reported by Market Watch, Jason Helfstein suggested in a note on January 12 “plenty of room for [subscription] growth in 2024”.

He increased his estimates for net additions in the fourth quarter to over 10 million from 9 million. For 2024, the additions will be more than 24 million, up from 21 million plus. Also, internal research led Wells Fargo analysts to increase their estimate on the streamer net additions to 10.4 million. Justin Patterson, analyst of KeyBanc Capital Markets, kept his overweight rating and raised his price target to $545 from $525.

BofA Securities analyst Jessica Reif Ehrlich increased her price target on Netflix’s stock to $585 from $525 and maintained her buy rating. Not only that, the analyst has made it clear the platform has left other streamers behind in this race.

Streaming giant has won the battle 

Netflix is set to further solidify its position as the top streaming service, with recent changes, including industry shifts, talent strikes, and an investor focus on profitability. “It is becoming increasingly clear that Netflix has won the ‘streaming wars,” she remarked. Since Netflix can now purchase more content from external providers, it can allocate less towards financing new productions and instead invest in established content, according to Reif Ehrlich. 

Netflix, which has around 247 million subscribers, gained 10 million new subscribers last year. In November, the streaming service accounted for 7.4% of the total television viewing time in the United States. This figure was second only to YouTube, which was at 9%. Amazon Prime Video was at 3.4% while Walt Disney Co. was at 1.9%. These statistics were obtained from Nielsen. So, Netflix is crushing it right now. Ads are helping them grow, and they are the top dog in the streaming world.

What do you think about this success? Drop your comments below!