Netflix (NASDAQ:) announced Wednesday that it will team up with The Trade Desk (NASDAQ:), Google (NASDAQ:) Display & Video 360 and ad tech firm Magnite to speed up automated ad buying. The company also made several other announcements as part of the Upfront 2024 press release.
Here’s how Wall Street analysts reacted:
BMO Capital: “We confirm that TTD is our top pick for SMID capitalization, as the CTV demand partnership with Netflix reinforces our view that TTD is better positioned amid the massive $150 billion shift in linear TV opportunities to connected TV.”
Truist: “In our view, these partnerships were meant to happen given Netflix’s evolving advertising platform, which is now at a point where it can scale significantly by adding more users to its AVOD service.”
KeyBank: “As Netflix expands its advertising capabilities, we believe this could help support annual revenue growth of >10% in 2025 and beyond.”
J.P. Morgan: “NFLX announced it will build its own ad technology platform by the end of 2025 and will expand its sales partnerships this summer to include TTD, Google Display & Video 360 and Magnite, as well as Microsoft’s (NASDAQ:) Xandr. We believe today’s announcements demonstrate significant progress on the multi-year path to scalable advertising and underscore NFLX’s growing focus on differentiated live content.”
City: “The expansion of Netflix’s advertising technology partners has been a long time coming, and given TTD’s leadership in programmatic CTV, it was an obvious partner choice. However, given Netflix’s leadership position in CTV, we believe this is positive for TTD.”
Jeffries: “NFLX’s decision to bring on new programming partners (e.g., TTD, GOOG, MGNI) represents a faster-than-expected shift in connected TV advertising sales from direct deals to bid auctions. We believe this confirms our view that there will be fewer walled gardens. on CTV than on Search/Social.”
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UBS: “Along with the recent deal with WWE, we believe the addition of NFL rights will provide another lever to drive engagement, strengthen pricing power and scale the company’s advertising business (while introducing yet another source of advertising leakage from the traditional television ecosystem).”
Guggenheim: Netflix will broadcast at least one NFL game around the world on Christmas Day over the next three years, the streaming giant announced Wednesday, marking the company’s biggest bet on live sporting events.
“We estimate the value of NFLX’s NFL rights at $200 million to $250 million and approximately $185 million in direct advertising revenue.”
Morgan Stanley: “For OW NFLX, the reveal of 40 million ad-supported monthly active users is in line with our forecast, an increase from the 23 million achieved in early January. This is broadly in line with the +65% QoQ ad subscriber growth reported in 1Q24 results. “
Piper Sandler: “Netflix has announced that it will add Trade Desk as a programming partner this summer. While Netflix’s advertising business is still expanding, we believe the partnership should be a significant long-term opportunity for the Trade Desk.”