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Netflix’s ad strategy is working

July 19, 2024
in Business
Netflix’s ad strategy is working
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Netflix had 277 million membership as of June.

Netflix had 277 million membership as of June. Image: Patrick T. Fallon (Getty Images)

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Netflix had a great second quarter with increases in both subscriber growth and revenue, signaling that the company’s emerging ad strategy is paying off.

The streaming giant was so pleased with its most recent quarterly results that it bumped its full-year revenue growth outlook to between 14% and 15%, up from a previous projection of 13% to 15%.

The company’s revenue rose 17% to $9.5 billion in the three months ending June 30, compared with $8.2 billion in the same period the prior year. Its net income grew 44% year over year to $2.1 billion.

And Netflix’s paid memberships reached 277.65 million in the second quarter, up 16% year over year.

The streaming pioneer’s success comes as other media companies struggle to keep up and are still trying to figure out how to make their services profitable. It also shows that Netflix’s password crackdown and bet on advertising, which it first debuted on it platform in 2022, were not missteps.

The company said that its ad-supported memberships grew 34% quarter on quarter and that it accounted for 45% of all new sign up in markets where the plan is available.

“Our ad revenue is growing nicely and is becoming a more meaningful contributor to our business,” Netflix said in a press release. However, the company said it doesn’t expect advertising to be a “primary driver of our revenue growth in 2024 or 2025.”

Still, Netflix is going all in on ads. It touted that it closed over 60 pause ad campaigns — ads that appear when a program is paused — with big brands such as Expedia, Coca-Cola, Ford, L’Oréal and McDonald’s. Netflix will also start testing an in-house ad tech platform in Canada this year before launching it more widely in 2025.

Netflix also said it’s testing a new TV homepage design that would be more intuitive and increase the visibility of titles, synopses, genres and ratings. This comes after news that Disney is reportedly trying to make its streaming platform look more like Netflix’s.

On Wednesday, Netflix received 107 Emmy nominations — the most out of any network and streamer.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Quartz – https://qz.com/netflix-second-quarter-earnings-ads-1851599233

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