Beautiful Virgin Islands

Monday, Oct 06, 2025

Netflix: $11.5bn wiped from streamer's stock market value as ad funded service gets off to bad start

Netflix: $11.5bn wiped from streamer's stock market value as ad funded service gets off to bad start

One might have thought, to judge from the acres of newsprint and hours of airtime devoted to its documentary about the Duke and Duchess of Sussex, that this would be a boom time for Netflix.
Not so.

Shares of the streaming giant fell by more than 8% this afternoon, wiping $11.5bn from its stock market value, on a report that its new advertising-funded service has got off to a poor start.

Digiday, a specialist publication that covers the digital media market, reported that audiences for the service have fallen short of the numbers that Netflix guaranteed advertisers.

It said, quoting five advertising agency executives, that audiences had only been around 80% of the numbers promised to advertisers in some cases and that, as a result, Netflix was offering them refunds on adverts yet to run.

Reporter Tim Peterson quoted one ad agency executive as saying: "They can't deliver. They don't have enough inventory to deliver. So they're literally giving the money back."

The article said that Netflix had been selling ads on a so-called 'pay on delivery' basis: in other words, advertisers only pay the company for viewers who actually watch their adverts.

It said that Netflix has been charging more, per numbers viewing adverts on its platform, than rival Disney+ - which briefly overtook Netflix earlier this year as the world's biggest streaming platform.

The company has been charging $65 for every 1,000 viewer impressions while Disney+ has been charging $50 for the same number. Digiday said that Netflix has since cut its price to $55.

The article added that, in some cases, advertisers had not been taking a refund but instead rolling over their ad spend to the first three months of next year in the hope that Netflix can build a bigger audience over time.

Other advertisers, though, have sought refunds so they can deploy their ad spend elsewhere during the crucial Christmas season.

The streaming wars

Netflix launched its new ad-funded service last month - seven months after first announcing it was thinking about the idea - in a bid to bolster its revenues.

The company shocked Wall Street when, in April, it announced it had suffered a fall in subscriber numbers during the first three months of the year.

The ad-supported service, which Netflix promised would carry just four to five minutes worth of advertising per hour, was launched in the US with a monthly subscription fee of $6.99.

Other streaming platforms, including Disney+, Hulu (which is jointly owned by Disney and Comcast, the parent company of Sky News) and HBO Max, which is owned by Warner Bros Discovery, are expected to charge more for their ad-funded services.

Wall Street is currently watching keenly to see whether Disney+ changes the price of its services more broadly following the dismissal last month of Bob Chapek, its former chief executive, who was replaced by his predecessor Bob Iger.

Digiday said that, while Netflix had struggled to meet its existing promises to advertisers, it was still seeking for ad deals for next year.

Separately, Netflix shares have also come under pressure after downbeat comments from one of the company's sternest critics on Wall Street.

Laura Martin, analyst at the investment bank Needham & Co, said that she eventually saw the business being overtaken by its competitors and eventually losing customers to them.

She told clients in a note to treat the shares "with caution" and added: "We see Netflix at a competitive disadvantage…because it doesn't own a bundle to lower churn in the US and it has largely saturated its offshore [total addressable market] already."

Today's decline in Netflix shares means that they have fallen by more than 51% so far this year - although they have rallied by some 60% since hitting their year's low in early May.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
×