Netflix’s Strategy Against YouTube, Warner Bros. Deal, $1.5B Ad Revenue

I mean, this is still very early days for Netflix. I mean, they didn't have advertising three years ago. They didn't believe in advertising three years ago. And so, you know, look, it takes time. I think what we're all looking for right now, if you have an ad account, I don't know whether you are ad-free or ad-supported...

Okay. So, you have the ads. And so, what you'll notice is that the ads actually are really boring. It looks like ads on any other television platform. And I think if you listen to what they're talking about, whether it's Ted Sarandos or Amy Reinhardt who runs advertising for them, the goal is for advertising to look and feel different. You know, the beauty of Netflix is that it isn't like a traditional programming layout where every Tuesday you have this and you watch from 8 to 11 with a programming grid. And so the advertising can also be different. And I think you're going to see them start to do more storytelling where as you're binging a series, maybe watching 50 episodes of something, the advertising is actually going to understand that you're binging and rather than seeing the same ad over and over again, you're going to see a story that's told throughout the advertising. And so I think it takes time for them to, you know, initially it was just, hey, let's just get this stood up, let's replicate what everyone else does. They have done that at scale, working with lots of partners like Amazon, like The Trade Desk for a traditional ad business. I think 2026 is where advertising on Netflix begins to look a lot more interesting. And that's one of the reasons I think you're going to see advertising double yet again to be over a $3 billion business.

Remember, yeah, I don't think you can really compare storytelling. You know, if you're a brand, any brand, and I'm sure The Information deals with lots of them for your ad business and sponsorship, and you think about what you're trying to do, you're trying to tell stories. And there really is nothing that tells stories like watching long-form video ads. That's why TV's been as powerful, and especially sports on TV has been as powerful as it has been for the ad industry. If you think about where Netflix is competing, and I would say this is not just Netflix, this is Netflix and Amazon as the real, because both of them have really come into the TV ad space in a big way over the course of the last three years with multi-billion dollar businesses. If you think about where they're eating from, remember linear TV is still a $65 billion advertising business. That $65 billion is moving faster and faster over to streaming, and Netflix and Amazon are big beneficiaries. And that's why you're seeing double-digit declines across linear TV, especially the cable linear TV universe. Those businesses are in a whole lot of pain, and it's going to get worse and worse in '26. And so I don't think this is about fighting with Meta. This is really, you know, the real opportunity here is to take...

For years, for years to come.