Netflix, Inc. (NASDAQ:NFLX) has a massive revenue-generating opportunity on its hands, but thus far it refuses to address it.
That opportunity lies in offering advertising on its platform. Business Insider has more details on how demand for Netflix ads — which are thus far completely non-existent — is perking up:
An increasing number of brands are looking to advertise on Netflix, Variety reports.
The growing demand comes as brands seek to adapt to declining traditional TV viewership and a rise in cord cutting. Netflix accounted for 40% of total over-the-top (OTT) US household viewing hours in April 2017, indicating the platform has become a home for cord cutters.
Netflix has a strong aversion to ads, but there are other ways Netflix can allow brands to leverage its audience without running traditional ad breaks…
Ways Netflix could offer ads without overtly having commercial breaks include product placement and merchandising. For example, a character on Stranger Things could be drinking a Pepsi, or a company’s product or service could even be weaved into a storyline itself (as Amazon did with Zillow in Hand of God).
Or, Netflix could make a whole lot more merch. Stranger Things apparel is already selling like hotcakes, and with a huge number of other shows to choose from, NFLX is clearly leaving money on the table.
Netflix, Inc. shares closed at $194.16 on Friday, down $0.97 (-0.50%). Year-to-date, NFLX has gained 56.83%, versus a 16.66% rise in the benchmark S&P 500 index during the same period.