Netflix announced its Q2 2024 earnings this week, reporting a 17 percent YoY uptick in revenues. Global subscriptions also reached 277 million, while the ads tier saw user growth of 34 percent quarter-on-quarter.
VideoWeek asked five experts from across the industry for their take on the results.
Raj Shah, Managing Partner, North America Lead, Telecoms, Media and Technology, Publicis Sapient
“Expect ad growth to continue, since 40 percent of Netflix sign-ups opt for ads and half watch over 20 hours of Netflix a month. The key now is appealing to advertisers. To support that, Netflix ad sales are no longer limited to buying through Microsoft, and advertisers can opt for The Trade Desk, Google, and Magnite, with an in-house solution coming in 2026.
Netflix still needs to diversify beyond subscriptions and ad sales. Let’s see if Netflix physical retail stores emulate Disney’s success, or just fold like a Netflix House of cards.
How Netflix evolves its AI-powered systems, such as recommendation algorithms, will also be critical. AI holds the promise of personalisation and innovation that can keep viewers engaged. There is also an opportunity for the streaming giant to offer creators new tools to help them tell their stories in more compelling ways, especially with the advent of generative AI.
Expect growth to continue, especially when Netflix’s sports deals with WWE and NFL go live.”
Lina Tonk, CMO, Recurly
“Netflix’s Q2 earnings showcase its ability to stay ahead of the curve through strategic innovation and diversification. The significant rise in revenue and earnings year-over-year underscores the true value of the subscription model.
The expansion of its ad-supported plan, which now boasts 40 million monthly active users, demonstrates robust growth, with over 40 percent of new signups opting for this tier.
The key here is offering personalised services and giving consumers options such as ad-tiered and variable price points, which will keep consumers subscribed.
Netflix’s exploration into sports entertainment and live events, including NFL games and high-profile boxing matches, further diversifies its content offering and will keep subscribers loyal. This continuous innovation in content and advertising technology is essential to maintaining its leading position in the streaming space.”
Edmund Mullins, Director, Inventory & Partnerships (EMEA), StackAdapt
“Netflix’s continued growth in terms of subscribers and revenue indicates that CTV remains one of, if not, the most engaging channels for audiences and that’s not going to change anytime soon.
The genius idea that streaming platforms like Netflix, Disney+, Discovery+ and others have now tapped into is satisfying audience’s craving for convenience when they want to watch live sporting events. Being able to easily switch from watching Jake Paul fight Mike Tyson then carry on binge watching Bridgerton is every subscriber’s dream.
This is a smoke signal to brands and advertisers to jump on the bandwagon and ensure that they’re including CTV in their marketing mix, especially with the ongoing summer of sports.
It’s simply about prioritising ad placement on the most engaging channels, but also making sure that these ads are seen by the target audience and that’s where having the right partners with a clear and proven roadmap to success comes in.”
Kieren Mills, Head of Broadcast, Total Media
“Despite the ever-unfolding turmoil in the streaming ecosystem, Netflix remains stronger than ever. Thanks to the huge success of its break-out original content like Baby Reindeer, it has become synonymous with high-quality content that keeps viewers coming back for more.
Netflix has stuck to its guns with the introduction of ad tiers and consequently cracking down on password sharing, with others in the space promptly following suit. It continues to cement its role as the most accessible streaming platform, seeing an influx of sign-ups to the lowest-priced tier.
It will be interesting to see how its sports offering evolves – with deals to host live NFL games, WWE and continue with their strategy of sports documentaries. Even after the blockbuster summer of sport, they’ll no doubt continue the party.
This will be compelling for an even wider pool of viewers which will attract more brands keen to connect with them through Netflix’s evolving ad offering. Our experience working with brands shows there is a lot of consideration for Netflix as a key channel to reach a premium audience with great content. It seems the streaming giant’s revenue will continue to hold strong into the future as it evolves commercially.”
Paul Clement, Strategic Partnerships Director, UIC Digital
“Reflecting on its Q2 earnings, Netflix remains the largest streamer, supported by its extensive content library, including original series, films and soon with its forthcoming ventures into sports entertainment. With revenue and earnings rising some 17 percent from the year-ago quarter, all eyes are on Netflix’s strategic push into this new arena.
Sports will be a major battleground for streamers, and it could be lucrative too, especially with the Premier League, Champions League, IPL, and the American Leagues at first instance.
Netflix’s recent WWE deal is set to pave the way towards this huge shift. Looking ahead, securing other major sports rights could obviously further boost Netflix’s subscriber numbers position in the market. However, it’s imperative that this is balanced with an exceptional user experience and palatable subscription fees.
Netflix would also do well to focus on how it can better connect with its users through engaging ways. This could be through investment in gamification and engagement techniques – for example, live polls, competitions and trivia, bringing a fresh and new dimension to the viewing experience across their vast catalogue.”
