LONG on NFLX

Okay, so I've been tracking Netflix for a while. I think it has gone pretty much under the radar, especially after the whole WBD / Paramount Merger thing, and especially since the departure of Reed Hastings.

I won't really go into fundamentals here, I think anyone can do a proper analysis of that.

I will go into what most people not in the industry will miss. Netflix is looking at ad as its next income stream. It is not as simple as what everyone thinks. It won't just be ads on the Netflix platform.

Netflix is on a hiring spree right now for Ad execs. What can possibly be an income stream on its own is custom brand partnerships and sponsorships tied in to the IP that it holds.

Surprisingly, this is not new. Before, there was cable, and cars(or other companies who were paying the huge bucks for adbuys) were a large part of why there was a pilot season. And I don't know if any on this subreddit can recall television back then, but you should be able to recall some of these branded sponsorships. It should also be no surprise that this segment is one that can be highly profitable.

Back when I was in broadcast, these partnerships essentially formed a third pillar of revenue on its own. Unfortunately, I no longer have the numbers on hand, but I was previously managing an entertainment news program that was practically paid for by 2 sponsors on the brand partnership level.

What would a brand pay for to be associated with Squid Game? Or Stranger Things? Given it's global reach, Netflix has the capability to segment brands on the same product. They can probably switch around product placement within the shows they have and cater that to specific regional audiences. How much would a local brand pay for that?

Their global ad pipeline is still being set-up/expanding/scaling up. While subscriber count will definitely be a core concern, I think the expectation of ad revenue hitting 3b is too conservative.

Unfortunately, when Netflix disrupted cable, it killed off this immensely profitable segment. Most who knew the ins and outs on how to make these sorts of branding and partnership deals were laid off, and many retired.

If Netflix can retain its subscriber count, and its not disrupted by another "Netflix", ad revenue hitting 3.5 or even 4b will not be beyond expectations I think. Probably the only thing holding that level of revenue back is how much Netflix wants to protect its IPs from commercialisation.

Keep a lookout on branding and partnership deals tied to IPs. If any streamer is able to pull that off, you can expect revenue to skyrocket.

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