Netflix Inc (NASDAQ:NFLX) is expected to rake in more dollars from United States advertisers than Disney+ in 2024 as the service’s higher prices and crackdown on password sharing drive users to its ad-supported membership tier, according to a new report from Insider Intelligence.
The report projects that Netflix’s ad revenue will increase 50.3% to about $1 billion in 2024.
In comparison, The Walt Disney Company (NYSE:DIS)'s streaming platform Disney+ is expected to see its U.S. advertising revenue increase 16.1% to $912 million next year.
Insider Intelligence analyst Ross Benes told Reuters that Netflix can sell ads at a higher price than other streamers due to pent-up demand for its ad tier.
“Because viewers tend to spend more time per day with Netflix than with other streaming services, Netflix's ad revenues are poised to grow significantly,” Benes said. "Disney is struggling more right now because they have had all these box office bombs."
According to the report, about 5% of Netflix’s U.S. subscribers are currently shown commercials, compared to 17% for Disney+. This is expected to grow to 7.5% for Netflix and 20% for Disney+ in 2024.
Netflix shares have gained 56.2% in the year to date, while Disney shares are up 3.4%.