Netflix Projects $3 Billion in Ad Revenue for 2026
Netflix is aiming to double its advertising revenue in 2026, targeting a total of $3 billion as the company continues building out its internal ad-technology stack. The company, which brought in over $1.5 billion from advertising in 2025, is making major strides in its ad-supported business model, now in its third year.
According to the company’s latest earnings report, Netflix attributes much of this growth to a strategic pivot away from relying on Microsoft and toward developing proprietary ad tech. This shift allows the company to better leverage first-party data, refine measurement tools, and offer more engaging ad formats to brands.
Ad-Tech Investments and Competitive Positioning
Netflix Co-CEO Greg Peters emphasized during the Q4 earnings call that the company is focused on refining its advertising platform, aiming to close the revenue gap between ad-supported and standard subscription tiers. “That ability to tap into this deep library of insights that we have ultimately enhances the performance of media buys,” Peters said.
He also noted that Netflix is expanding its advertising options with interactive formats and enhanced analytics, which are expected to improve outcomes for advertisers. These innovations are central to Netflix’s strategy to grow its footprint in the competitive advertising space.
Strategic Partnerships and Market Reach
In a significant move to scale its advertising business, Netflix formed a partnership with Amazon in September. Despite being streaming competitors, the deal allows Netflix’s ad inventory to be accessed through Amazon’s demand-side platform (DSP), broadening Netflix’s reach among advertisers.
The streaming service now reaches approximately 190 million monthly active viewers on its ad-supported tier. Furthermore, Netflix achieved a new milestone in Q4 2025, surpassing 325 million paid memberships. Total revenue for the quarter increased by 18% year over year, reaching $12.1 billion.
Warner Bros. Deal and Industry Disruption
Meanwhile, Netflix is in the midst of finalizing an $83 billion acquisition of Warner Bros., a move that could reshape the streaming landscape. Originally announced late last year, the deal has faced complications due to competing interest from Paramount Skydance. However, the terms were recently revised into an all-cash deal, valuing Warner Bros. at $27.75 per share.
Netflix executives remain optimistic that the acquisition will pass regulatory scrutiny and view it as a strategic asset to stay competitive. Warner Bros. brings a rich portfolio, including HBO and DC Comics properties, which could further bolster Netflix’s content offerings.
“We believe Warner Bros. will enhance our ability to compete not only with traditional streaming services but also with evolving digital platforms,” Peters noted.
The Rising Threat of YouTube
During the earnings call, Co-CEO Ted Sarandos highlighted YouTube as a significant and growing threat. Once known primarily for user-generated content, YouTube has evolved into a full-fledged competitor in the premium content space. Recently, YouTube secured the rights to broadcast the Oscars and continues to deliver major live sports content through NFL Sunday Ticket on its connected TV platform.
“YouTube is not just [user-generated content] and cat videos anymore,” Sarandos said. “They are TV. So we all compete with them in every dimension: For talent, for ad dollars, for subscription dollars, for all forms of content.”
Artificial Intelligence and Future Innovation
On the innovation front, Netflix is increasingly integrating artificial intelligence into its advertising strategy. The company began testing AI-driven ad solutions last year, focusing on tailoring creative content to specific intellectual properties. AI is also being used for ad concept development and campaign planning, providing brands with efficient tools to create more impactful messaging.
With these advancements, Netflix aims to deliver highly personalized and scalable ad experiences, positioning itself as a leader in the future of digital advertising.
This article is inspired by content from Original Source. It has been rephrased for originality. Images are credited to the original source.