Netflix revenue grew 17% as hit series Baby Reindeer and Bridgerton attract audiences

Netflix is celebrating a successful second quarter for 2024 with its overall revenue reaching $9.56 billion – up by 16.8% year-on-year compared to 2.7% in Q2 2023. 

The success is mostly attributed to the streaming service provider’s improved entertainment offering with highly-anticipated releases such as Baby Reindeer – with 88.4 million views – and Bridgerton with 172 million views. 

Netflix also credited part of its success to the new homepage it started testing in June, which improves discovery with more visible title information at glance, larger and more dynamic title previews, a simplified navigation bar, and a ‘My Netflix’ page for members – previously only available on mobile.

In Q2, the number of paid members increased by 16.5% year-on-year to nearly 278 million – nearly double the success rate for Q3 2023, which stood at 8%. The number of its ad member base also increased by a third (34%) quarter-over-quarter and accounted for 45% of all sign ups in its ads markets.

Continued growth for Netflix’s ads business 

The streaming giant will continue to phase out its basic plans in the US and France in lieu of the ad tier.

In addition to scaling its ads business, Netflix is working on building an in-house adtech platform that it will be testing in Canada this year and launching more broadly in 2025. The platform will give advertisers new ways to buy, insights to leverage, and ways to measure impact.

Spencer Adam Neumann, chief financial officer at Netflix, said on the earnings call: 

“Ads is kind of one more tool in our tool chest there. We're doing the hard work now to improve our service across the board. So we finish the year strong in '24 and drive growth into '25 and beyond. 

“We're small in every measure. [...] We're a small share of TV time. We're small in terms of penetration of connected TV homes. We're small in revenue market share. And we're going to grow in those areas across the board and ads are going to be a bigger piece of that puzzle. 

“Just we won't have it be primary in '24 or '25, but it contributes. [...] And then when you get into '26 and beyond, it can be even more meaningful and hopefully, it becomes the point where it is a primary contributor, given all of that engagement and reach that we're building.”

Netflix is also working with a number of partners to improve its ads business including Barb in the UK, which starting in September, will start measuring its ad-supported plans. Other features that make it easier to measure the impact of Netflix ads include the pause or keep watching buttons for users. 

Other partners on the programmatic side include The Trade Desk, Google DV 360, and Magnite, who will be working with Netflix to improve its capabilities over the summer. 

With Netflix investing in live programming on its platform – having announced a long-term partnership with WWE in January and picking up the exclusive rights to host at least one of the NFL Christmas Games in 2025 and 2026 – this provides a massive opportunity for brands that want to tap into cultural moments. 

This is a ‘smoke signal’ for brands to look at CTV

Following Netflix’s Q2 earnings release, PMW’s panel of experts spoke out about how Netflix’s live sports offering will impact its business and why the platform needs to be looking at other solutions including AI to power its business. 

Raj Shah, managing partner, North America lead, telecoms, media and technology, Publicis Sapient, said: “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.”

By investing more into live entertainment and sport, brands can tap into highly-engaged and targeted audiences, which proves that CTV is an important growth channel for advertisers. 

Edmund Mullins, director, inventory and partnerships (EMEA) for StackAdapt, said: “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.”

Netflix’s continued success is a result of knowing what its consumers want to see and keeping them engaged through personalised experiences and diversifying its content offering.

Lina Tonk, chief marketing officer, Recurly, said: “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.”

Kieren Mills, head of broadcast, Total Media, said: “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."