According to a recent report from Ampere Analysis, Netflix will earn more from advertising in Western Europe than in the U.S. by 2027. The analyst company forecasts that, in Western Europe, the streamer will generate $1.9B in annual advertising revenues by 2027, almost as much as its forecast advertising revenues for all of North America ($2.1B when Canada is included.) The company will also earn $841 million in ad-tier subscription fees in Western Europe in 2027, and $1B in North America. Netflix is set to earn $5.5B in advertising revenues globally by 2027, plus a further $3B in ad-tier subscription fees.
Ampere predicts that 19.3% of Western European users will sign up to an ad-supported tier by 2027, with most of them coming from Netflix’s existing customer base. The analyst company also believes subscriptions for the ad-supported service will grow at a rate 1.8% above an SVOD-only model, earning $2.2B more than it would have done without the ad-supported tier, by 2027. This will be driven by an ARPU uplift “combined with a modest increase in the overall subscriber base.”
According to Ampere, the 2023 ARPU for Netflix in Western Europe will be 4.9% higher than without the ad-supported tier, with this increasing to 8.6% by 2027.
Ampere Analysis said: “Western European viewers have the highest price sensitivity among Netflix’s customers which, combined with relatively high advertising rates on a Cost per Thousand (CPM) basis, makes advertising in the region a strong opportunity for the streaming giant.”
