In a landmark achievement, Netflix's stock reached a new milestone on Tuesday, closing at a record high of just under $699 per share, marking a notable increase of over 1%. This surpasses the previous record of around $692 set earlier in 2021. Furthermore, Netflix demonstrated its thriving expansion into the advertising market, securing an impressive "150% plus increase in upfront ad sales commitments over 2023," according to a recent company blog post.

The success of Netflix's upfront negotiations can be attributed to its strategic focus on live sports content and its popular original shows. Anticipated releases like "Happy Gilmore 2" and "Squid Game 2," alongside noteworthy acquisitions such as the NFL Christmas Day games and WWE Raw starting in January 2024, have propelled the streaming giant's trajectory. Amy Reinhard, President of Advertising at Netflix, highlighted the enthusiasm of advertising partners like LVMH, Amazon, Hilton, L'Oreal, and Google while emphasizing their appreciation for Netflix's engaged audience and top-notch programming.

Moreover, industry analysts believe that Netflix's recent share price rally is not solely fueled by advertising efforts. The company is also well-positioned to implement price hikes. In January 2022, Netflix raised the cost of its Standard plan from $13.99 to $15.49 per month. Subsequently, the Premium tier experienced a $2 increase to $19.99 per month, followed by another price adjustment to $22.99 in October. Notably, the ad-supported offering, introduced less than two years ago, remains one of the most affordable plans among major streaming platforms at $6.99 a month.

Netflix's objective is to establish ads as a significant source of revenue for sustainable growth by 2025 and beyond. Consequently, the company plans to phase out its lowest-priced ad-free streaming plan, ensuring that the $15.49 Standard plan becomes the most affordable option for an ad-free experience. Jefferies analyst James Heaney suggests that the Standard plan is likely to face a price hike in December, pointing to Netflix's venture into sports content as a driver for both new subscribers and the promotion of its password sharing initiative.

Last month, Netflix reported steady progress in scaling its ad business, with a 34% quarter-on-quarter growth in ad-tier memberships. This growth was bolstered by the removal of the basic plan in select markets. The company stated that it is on track to achieve critical ad subscriber scale by 2025, providing a strong foundation for further expansion in 2026 and the years to come.

Netflix's impressive stock performance and its foray into advertising have grabbed the attention of investors and industry insiders. As the streaming giant continues to leverage its captivating content and expand into diverse revenue streams, the company remains steadfast in its pursuit of sustained growth and dominance in the evolving media landscape.

[Author's Note: The information in this article is sourced from a company blog post, analyst statements, and Netflix's previous earnings release as reported by Yahoo Finance.]