Netflix shares near record high as company touts ad sales ahead of NFL and WWE debuts

Shares of Netflix ( NFLX ) posted a record close on Tuesday, ending the day up more than 1% to trade just below $699 a share. The stock’s previous record close was just under $692 in 2021.

Earlier in the session, the stock also hit an intraday high of $711 per share, ahead of its previous high of $701 for the day.

On Tuesday, the company again laid out its push into the ad market, revealing in a company blog post that it has secured “150%-plus growth in initial ad sales commitments in 2023.”

Netflix’s successful initial negotiations, a time when networks and media companies scramble to secure advertising commitments for upcoming series and events, comes as the platform moves closer to live sports and doubles down on its biggest shows.

Upcoming movies and series like “Happy Gilmore 2” and “Squid Game 2,” along with the recent acquisition of live sports content like NFL games on Christmas Day and WWE Raw starting in January 2024, helped fuel success, according to the company.

“Our advertising customers remain delighted with our highly engaged audiences and the variety and quality of our programming,” said Amy Reinhard, president of advertising at Netflix.

Reinhard cited advertising partners that include LVMH, Amazon, Hilton, L’Oreal and Google, among others. The company will launch its in-house ad technology platform globally in 2025.

But it’s not just publicity that’s fueling the recent rally.

Analysts also said the company is well positioned to raise prices. Netflix last raised the price of its Standard plan in January 2022, raising the monthly cost to $15.49 from $13.99. It also raised the price of its Premium tier by $2 to $19.99 per month at the time; the company raised the cost of that plan again in October to $22.99.

The company has yet to raise the price of its ad-supported offering, introduced less than two years ago, which remains one of the cheapest ad plans among all the major streaming players at $6.99 a month.

Netflix has previously said its goal is to make advertising “a more substantial revenue stream that will contribute to sustained and healthy revenue growth in 2025 and beyond.” As a result, it will phase out its lowest-priced ad-free streaming plan, making the $15.49 Standard plan the cheapest offering for an ad-free experience.

In a note published earlier this month, Jefferies analyst James Heaney said the Standard plan would likely be the one hit by a December price hike, especially given the company’s foray into sports — a move that “increases its pricing”.

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“We think NFLX has positioned itself throughout this year for a year-end price increase,” Heaney said. “We view NFL game action (at only ~2% of annual content spend) as a significant driver for subscribers in Q4, creating a new tailwind for NFLX’s password-sharing initiative and supporting price growth.”

In last month’s earnings release, Netflix said it was making “steady progress in growing its ad business” with ad-level memberships up 34% quarter-over-quarter, boosted in part by the elimination of the Basic plan in select markets.

“Given this sustained progress, we believe we are on track to reach a critical scale of ad subscribers for advertisers in our advertising countries in 2025, creating a strong foundation from which to further grow our advertiser membership in 2026 and beyond,” the company said. said.

Alexandra Canal is a senior reporter at Yahoo Finance. Follow X @allie_canal, LinkedIn, and email them at [email protected].

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