Video streaming giant Netflix (NFLX) has introduced a new metric that measures how many people are watching ads on its platform. Interestingly, the firm stated that its $7.99 ad-supported plan, which is now available in 12 countries, reached over 190 million monthly active viewers (MAVs) in October. This number includes anyone who watched at least one minute of ads per month and is adjusted using Netflix’s own research to estimate how many people typically watch per household. Even viewers on non-ad plans are counted if they watched live events, since those have ads for everyone.
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Previously, Netflix used a different metric called monthly active users (MAUs), which counted how many accounts were active but didn’t show how many actual people were watching. For example, one account could have several people watching together, which made the data less accurate for advertisers. As a result, the company’s head of advertising, Amy Reinhard, explained that the new viewer-based measurement gives advertisers a clearer and more complete picture of who their ads are reaching.
It’s also worth noting that five-star JPMorgan analyst Doug Anmuth expects ad revenue to more than double from $1.4 billion in 2024 to $2.9 billion in 2025, and then rise another 45% to $4.2 billion in 2026. In addition, Netflix has improved its ad tools by partnering with companies like Amazon (AMZN), Google (GOOGL), The Trade Desk (TTD), and Yahoo in order to give advertisers more ways to reach viewers.
Is NFLX Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 26 Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NFLX price target of $1,398.59 per share implies 28% upside potential.
