Netflix & The Advertising Game

One gathers Netflix, that purveyor of moving pictures, has been rather preoccupied of late. A spot of bother with acquisitions, you see. Warner Bros. Discovery, Paramount Skydance… terribly tiresome, all that negotiation. Honestly, one would think they had nothing better to do than squabble over studios. It’s all rather dramatic, of course, but one suspects the shareholders are beginning to feel a trifle fatigued by the whole affair.

However, amidst this corporate ballet, a rather more interesting development has been unfolding. A quiet little triumph, if you will. Something to do with advertising. Yes, advertising. And, rather surprisingly, it appears to be… flourishing. Does this mean, with a thousand dollars to spare, one might consider a flutter on the shares? One is always terribly cautious, naturally.

It All “Adds” Up, Doesn’t It?

Last month, during a presentation that I’m assured was frightfully dull, Netflix revealed some figures concerning its advertising tier. And, rather to my astonishment, they were… impressive. A 150% increase in ad revenue, reaching $1.5 billion. A mere 3% of their total income, admittedly, but a promising start, wouldn’t you agree? And, if one is to believe the pronouncements of their co-CEO, Greg Peters, this is merely the prelude.

Mr. Peters, with a commendable lack of hyperbole, suggests a doubling of that figure in 2026 – a cool $3 billion. Considering their projected revenue of $51.2 billion, that would represent nearly 6% of the total. Not bad for a “side hustle,” as they so charmingly put it. One begins to suspect they’ve stumbled upon something rather clever. They’re accelerating the strategy, improving capabilities, and expanding demand sources. All terribly technical, of course, but one gathers it involves more ad features, more measurement, and a general air of efficiency.

They’re introducing new ad formats, including these “interactive video ads” – a rather modern notion, frankly. And, crucially, they possess a treasure trove of data – first-party data, as they call it – allowing them to target these ads with a precision that is, frankly, a little unsettling. Over 190 million monthly active viewers, ripe for the picking, one might say. They’re working to close the gap between the revenue generated by their full-priced subscribers and those on the ad tier. A commendable ambition, if slightly mercenary.

All this, of course, has been overshadowed by the aforementioned acquisition drama, which has resulted in a 42% decline in the share price. Rather excessive, wouldn’t you say? One suspects the market has overreacted. A little volatility is to be expected, naturally, but this seems… unduly pessimistic.

With a thousand dollars, one can acquire approximately twelve shares of Netflix stock. And, at a price-to-earnings ratio of 30 – near a three-year low – there appears to be a reasonable amount of upside for those willing to accept a little turbulence. One is not suggesting a reckless plunge, naturally. But a carefully considered investment? Perhaps. It’s certainly more diverting than watching the corporate shenanigans unfold. One always appreciates a little bit of intelligent speculation.

2026-02-25 10:52

It All “Adds” Up, Doesn’t It?

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