Netflix blazed a path in the streaming era that many of its media rivals have tried to follow. As it has tried to navigate Madison Avenue, however, the company has found bumps in the road. The streaming giant last week rolled back its projections for advertising revenue, calling for $2.7 billion instead of $3 billion by the end of 2026.
At a time when marketers have been moving their dollars from linear TV to streaming video by the millions, the disclosure was surprising. Netflix co-CEO Greg Peters cited “some delays in the rollout and partner integrations” for some of its new advertising products as a primary culprit for the pared-back estimates. Media buyers, however, say Netflix has for months held lofty expectations that are out of sync with the general advertising market.
These executives say Netflix’s pricing for inventory remains too high, the process for accessing some of its inventory is too removed from the rest of the market, and that the company’s interest in selling ad-supported sports events like Christmas Day games for NFL football has not been matched with a sales executive who is versed in the nuances of such telecasts. Netflix declined to make executives available for comment. The streamer for years vowed never to sully its viewing experience with commercials, but media economics, and increased competition from services like Amazon’s Prime Video, HBO Max and Disney+ have not let it hold to those convictions.
And just as Netflix has made a concentrated foray into ad sales, the market for streaming inventory has been undermined by a glut of supply. Amazon has loads of ads to sell, and traditional media outlets do as well. The sheer tonnage of streaming inventory available has given advertisers the upper hand in negotiations.
To be sure, streaming is soaring. The volume of ad commitments put toward streaming in the most recent “upfront” video market rose a whopping 30%, according to consultancy Media Dynamics, hiking to about $17.2 billion, compared with about $13.2 billion in the 2025 market. But a rising swath of digital inventory, spurred by the rise of cheap FAST channels and increased inventory on mainstream streamers, has weakened the media companies’ stance.
The cost of reaching 1,000 viewers, a key metric in these annual negotiations that is known as a CPM, is under clear pressure. Streaming CPMs during the upfront fell 4.9%, to $25.90 from $27.75, according to Media Dynamics. This upfront marked the third year in which media companies agreed to what is known as “rollbacks,” or reductions in the rate of change in pricing they seek for the viewers they deliver.
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