Three years after launch, Netflix’s advertising business started making a little noise in 2025. But with Warner Bros. and HBO Max in the fold, the streaming giant’s ad ambitions could be roaring in no time.
A combination between Netflix and HBO Max, who have traditionally both been less reliant on advertising than most of their rivals, would give the former a much larger catalog of films and TV shows to sell ad inventory against, offering more leverage to better compete with legacy media for a larger slice of Madison Avenue’s dollars.
While much of the attention on the acquisition has focused on Warner Bros.’ valuable IP and its HBO Max subscriber base, no less important is its ability to supercharge Netflix’s advertising business. As the streaming giant prioritizes engagement over subscriber growth, the ad business becomes an increasingly critical part of its expansion, with Netflix eyeing roughly $9 billion in global ad sales by 2030 as it aspires to reach a $1 trillion market cap.
There’s plenty of room to grow. The more than $1.5 billion in ad revenue generated by Netflix represents just 3% of its total revenue. During its fourth quarter earnings call last month, Netflix co-CEO Greg Peters said the the average revenue per user gap between its ad-supported and ad-free offerings would narrow as the business adds new ad partnerships and expands its features and measurement capabilities.
Meanwhile, Warner Bros. Discovery, who has a total of 128 million streaming subscribers globally, does not provide a specific breakdown of ad-supported vs non ad-supported HBO Max subscribers, but previously said roughly half of new subscribers choose the ad-supported option. Expanding the ad tier’s reach in existing markets is one lever the company is pulling as it targets at least 150 million streaming subscribers by the end of 2026.
“Whether HBO is bundled or rolled right into Netflix, the merger would bring in more ad-supported…