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 accelerate automated ad buying. The company also made several other announcements as part of its Upfront 2024 press release.
Here’s how Wall Street analysts reacted:
BMO Capital: “Reiterate Outperform for TTD, our top SMID-cap pick, as a Netflix CTV demand partnership reinforces our view that TTD is best-positioned against a massive $150B linear TV opportunity shift towards connected TV.”
Truist: “These partnerships were bound to happen in our view given Netflix’s evolving ad platform, which is now at the point where it can scale materially with the scaling of users for its AVOD service.”
KeyBanc: “As Netflix deepens its ad capabilities, we believe this could help support >10% annual revenue growth in 2025E and beyond.”
JPMorgan: “NFLX announced that it will build an in-house ad tech platform by the end of 2025 & expand its sales partnerships this summer to TTD, Google’s Display & Video 360, & Magnite, in addition to Microsoft (NASDAQ:)’s Xandr. We believe today’s announcements show solid progress in the multi-year journey toward a scaled advertising tier, & highlight NFLX˖s growing focus on differentiated live content.”
Citi: “Netflix broadening its ad tech partners has been anticipated for some time, and with TTD’s leadership in decisioned programmatic CTV, it was a clear partner choice. That said, with Netflix’s premier positioning in CTV, our view is this is positive for TTD.”
Jefferies: “NFLX’s decision to onboard new programmatic partners (e.g., TTD, GOOG, MGNI) represents a faster-than-expected transition of Connected TV ad sales from direct deals into biddable auctions. We believe this validates our view that there will be fewer Walled Gardens in CTV than there are in Search/Social.”
UBS: “Along with the recent WWE deal, we believe the addition of NFL rights provide another lever to drive engagement, enhance pricing power and scale the company’s ad business (while presenting another source of leakage for marquee programming out the traditional TV ecosystem).”
Guggenheim: “Netflix will stream at least one NFL game globally on Christmas Day for the next three years, the streaming giant announced Wednesday, marking the company’s biggest bet on live sports yet.”
“We estimate a cost of $200-250mm for NFLX’s NFL rights and ~$185mm in direct advertising revenue.”
Morgan Stanley: “For OW NFLX, the disclosure of 40mm ad-supported global monthly active users is in line with our forecast, an increase from 23mm reached in early January. This is broadly consistent with the +65% ad membership growth QoQ reported with 1Q24 results.”
Piper Sandler: “Netflix announced it will be adding Trade Desk as a programmatic partner this summer. While Netflix’s advertising business is still scaling, we think the partnership should be a significant long-term opportunity for Trade Desk.”
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