Netflix is projected to become the third-largest ad-supported streaming service in Australia by 2027, according to the latest report from Ampere Analysis. The analysis forecasts that Netflix will generate over AUD$150 million in advertising revenue in Australia by that year, with projections putting the US giant behind only 7Plus and 9Now.

Netflix introduced its hybrid ad tier in Australia in November 2022. This tier offers a reduced fee for users who opt into the plan, which includes advertisements. Ampere Analysis estimates that by 2027, over 2 million subscribers will be on Netflix's hybrid ad tier.

The streaming giant has set its ad price points at a premium compared to the market average. This is managed through maintaining low in-stream ad loads. Netflix aims to achieve ad loads of 4-5 minutes of advertisements per streamed hour, a strategy intended to drive growth in the advertising market.

Senior Analyst at Ampere Analysis, Ed Ludlow, said: "Our expectations for Netflix’s growth reflects the streamer’s ability to generate ad impressions through its large subscriber base and popular content catalogue, which keeps audiences engaged for long periods. If it is to surpass its BVOD rivals in Australia for ad revenue, the streamer needs to continue to coax users onto the ad-supported tier, maintain the premium positioning of its inventory, and focus on scaling to 4-5 minutes of filled ad slots per hour."

In contrast, Amazon Prime Video has quickly scaled its hybrid offer by transitioning its entire subscriber base to the ad tier at launch. However, Amazon's potential for further growth in ad revenue is contingent upon increasing per-user video consumption levels.