Netflix (NFLX) stock hit a new all-time high on Tuesday, rising more than 1% to close at just under $699 per share. The stock’s previous high close was just under $692 in 2021.
At the beginning of trading, the stock also hit an intraday high of $711 per share, higher than the previous intraday high of $701.
The company on Tuesday once again touted its entry into the advertising market, revealing in a company blog post that it had secured “more than 150% growth in prepaid ad sales contracts compared to 2023.”
Netflix’s pre-negotiations, a time when networks and media companies pitch to secure advertising deals for upcoming series and events, have been successful, as the platform leans into live sports coverage and is hosting its biggest shows. This is being realized as we double our efforts.
Recent acquisitions include upcoming movies and series such as “Happy Gilmore 2” and “Squid Game 2,” as well as live sports content such as the NFL Christmas Day game and WWE Raw starting in January 2024. He says it helped him succeed. to the company.
“Our advertising clients continue to be excited about our loyal audience and the diversity and quality of our programming,” said Amy Reinhardt, president of advertising at Netflix.
Reinhardt listed advertising partners including LVMH, Amazon, Hilton, L’Oreal and Google. The company plans to launch an in-house ad tech platform globally in 2025.
But advertising isn’t the only thing driving recent stock gains.
Analysts also say the company is well-positioned for price increases. Netflix last increased the price of its Standard plan in January 2022, increasing the monthly fee from $13.99 to $15.49. We also increased the price of our premium tier by $2 at the time to $19.99 per month. The company raised the cost of its plan again in October to $22.99.
The company has yet to raise the price of the ad-supported service it introduced less than two years ago, making it one of the cheapest ad plans among the major streaming players at $6.99 per month.
The Netflix logo was photographed at the premiere of the fourth and final season of the television series “The Umbrella Academy” on August 5, 2024 in Los Angeles, California. (Reuters/Mario Anzuoni) (Reuters/Reuters)
Netflix has previously said its goal is to make advertising a “more substantial revenue source that will contribute to sustainable and healthy revenue growth in 2025 and beyond.” This will phase out the lowest-priced ad-free streaming plan, making the $15.49 Standard plan the cheapest plan for an ad-free experience.
Jefferies analyst James Heaney said in a note earlier this month that the Standard plan is likely to take a hit from the December price increase, especially given the company’s expansion into sports. “This will further increase our pricing power,” he said.
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“We believe NFLX has been poised for year-end price increases throughout this year,” Heaney said. “We expect NFL gaming efforts (only about 2% of annual content spending) to be a key driver of subscriber numbers in the fourth quarter, creating further tailwinds for NFLX’s password sharing initiatives and supporting price increases. ”
In last month’s earnings announcement, Netflix said that the number of advertising tier members had increased 34% quarter-on-quarter, helped by the discontinuation of the basic plan in some markets, and that the company was “expanding its advertising business steadily.” ” he said.
“Given this continued progress, we are on track to achieve significant ad subscriber scale for advertisers in advertising countries in 2025, with further growth in ad subscriber numbers expected in 2026 and beyond. “We believe we have a strong foundation to build upon,” the company said. Said.
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on X @allie_canalVisit LinkedIn and email alexandra.canal@yahoofinance.com.
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