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Netflix stock just hit an all-time high.
On Tuesday, shares of the streaming giant soared past their 2021 record intraday high of $701 to trade around $710. The moves come as investors applaud the company’s foray into live sports while its ad-supported tier continues to gain traction, with the company revealing in a blog post that it secured “a 150% plus increase in upfront ad sales commitments over 2023, in-line with our expectations.”
Upcoming movies and series like “Happy Gilmore 2” and “Squid Game 2,” along with the recent acquisition of live sports content like the NFL Christmas Day games and WWE Raw, which will kick off in January 2024, have fueled the success of those ad partnerships, Netflix said.
“Our advertising clients remain excited about our highly engaged audience and the variety and quality of our programming. For Season 3 of ‘Bridgerton’ — our sixth most popular English-language TV series of all time — we secured multiple international on-screen title sponsors including L’Oreal, Pure Leaf, Amazon Audible, Puig, Booking.com, Stella Artois, and Hilton,” Amy Reinhard, president of advertising at Netflix said.
As advertising adoption gains traction, the company is also well-positioned to hike prices.
Netflix last hiked the price of its popular Standard plan in January 2022, upping the cost to $15.49 from the prior $13.99. It also raised the price of its Premium tier by $2 to $19.99 a month at the time before hiking the cost of that plan once again in October to $22.99.
The company has yet to raise the price of its ad-supported offering, introduced under two years ago, which remains one of the cheapest ad plans among all of the major streaming players at $6.99 a month.
Netflix has previously said its goal is to make ads “a more substantial revenue stream that contributes to sustained, healthy revenue growth in 2025 and beyond.” It will phase out its lowest-priced ad-free streaming plan as a result, making the $15.49 Standard plan its lowest-priced offering for ad-free experiences.
Analysts have said the Standard plan is one that could likely be hit by price hikes later this year.
Netflix’s record-high price action on Tuesday follows a mid-July sell-off that hit shares after the company reported revenue guidance that missed Wall Street’s expectations for the current quarter. Shares had also been under pressure from a more recent sell-off in Big Tech that’s since recovered.
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