Netflix Reports 17 Percent Revenue Gain in Q2

Netflix revenues rose 16.8 percent in the second quarter to $9.6 billion, lifted in part by membership gains for its advertising tiers.

Membership to its ad tiers was up 34 percent in the quarter, the streamer noted. Netflix ended Q2 with 277.65 million paid members, a gain of 8.05 million in the period.

The platform hailed its continued high engagement levels, noting, “In H1 2024 (and despite headwinds from paid sharing) Netflix generated more view hours in the Nielsen top 10 across film, series and licensed titles than all the other streamers combined. The challenge for so many of our competitors is that while they are investing heavily in premium content, it’s generating relatively small viewing on their streaming services and linear continues to decline.”

Highlights for Netflix in Q2 included the return of Bridgerton, the buzzy Baby Reindeer, the Indian original The Great Indian Kapil Show and events like The Roast of Tom Brady.

“Our movies and TV shows drive excitement and fan engagement on YouTube, as well as social media. We believe that our entertainment offering satisfies important needs for both consumers and the creators of great movies and TV shows, who need partners that can share in the risk inherent in bringing these stories to life. So looking to the future, we believe our biggest opportunity is winning a larger share of the 80 percent plus of TV time (primarily linear and streaming) that neither Netflix nor YouTube has today. If we execute well—better stories, easier discovery and more fandom—while also establishing ourselves in newer areas like live, games and advertising, we believe that we have a lot more room to grow. Across streaming, pay TV, film, games and branded advertising, it’s a $600 billion-plus market, and today Netflix accounts for just 6 percent of that revenue. But success starts with the consumer. Because when we delight people with our entertainment, Netflix can drive higher engagement, revenue and profit than the competition.”

Netflix addressed the bundling trend taking hold across the streamer ecosystem, stating, “We haven’t bundled Netflix solely with other streamers like Disney+ or Max because Netflix already operates as a go-to destination for entertainment thanks to the breadth and variety of our slate and superior product experience. This has driven industry leading penetration, engagement and retention for us, which limits the benefit to Netflix of bundling directly with other streamers.”

The platform also pointed to the success of its ad tier, which now accounts for more than 45 percent of new signups in markets where it is available. “Given this sustained progress, we believe that we’re on track to achieve critical ad subscriber scale for advertisers in our ad countries in 2025, creating a strong base from which we can further increase our ad membership in 2026 and beyond. Our ad revenue is growing nicely and is becoming a more meaningful contributor to our business. But building a business from scratch takes time—and coupled with the large size of our subscription revenue—we don’t expect advertising to be a primary driver of our revenue growth in 2024 or 2025. The near term challenge (and medium term opportunity) is that we’re scaling faster than our ability to monetize our growing ad inventory. It’s why continuing to build our ad sales, measurement and tech capabilities is so important. Based on everything we’ve learned and our progress over the last 18 months—we’re confident that advertising will be a key component of our longer-term revenue and profit growth.”

Revenues in the U.S. and Canada rose to $4.3 billion with paid memberships at 84.1 million, a gain of 1.45 million. EMEA revenues hit $3 billion, with memberships up by 2.24 million to 94 million. In LatAm Netflix added 1.5 million subs to reach a base of 49.25 million, with revenues at $1.2 billion. AsiaPac revenues hit $1.05 billion, adding 2.8 million subs to reach 50.3 million.