Netflix Expects Ads to Provide a Substantial Revenue Stream by Next Year

Netflix (NASDAQ: NFLX) told investors in an earnings call this week that its ad-supported tier, which now boasts more than 23 million monthly active users, is still a very small part of its business. That might seem like a massive size in absolute terms, but it's only a small subset of the company's 260 million members. Further, the streaming service is still scaling its ad products to access this audience.

But the days of Netflix's ad business being immaterial to overall results won't last much longer. Management expects the nascent business to contribute to its financials substantially by next year.

Here's a closer look at this important catalyst for the business and the stock.

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Source Fool.com