The streamer is ready to go all in on live entertainment.
As Netflix looks to bolster its position as the dominant player in streaming, it is joining other media companies in embracing the world of live programming. Following the success of its special The Roast of Tom Brady, which aired in May and attracted Netflix’s largest live audience yet of 22.6 million views, the streamer is ready to go all in on live entertainment with a roster of upcoming shows, films, boxing matches and sports programming. “We’re in live because our members love it; it drives a ton of engagement and it drives a ton of excitement,” said Ted Sarandos, co-CEO of Netflix, during the company’s second-quarter earnings call yesterday (July 18).
The company has recently been pushing further into event-focused content, revealing earlier this year that it will be the home for two Christmas NFL games in 2024 and stream at least one game in both 2025 and 2026. In addition to other slated live events like an upcoming comedy show from Joe Rogan, Netflix will host weekly WWE programming as of next year. “I would call that a really fast ramp,” said Sarandos, who described Netflix’s new foray as “buzzy, exclusive, live entertainment.”
Netflix’s other bets on advertising and password-sharing crackdowns also appear to be paying off. The streamer reported $9.5 billion in revenue in the April-June quarter, up 16.8 percent from the same period a year prior. Quarterly net income came at $2.1 billion, up 44 percent year-over-year. During the quarter, Netflix added 8 million new subscribers a total of more than 277 million.
Membership for the streaming service’s more affordable ad-supported tier also fared well, jumping by 34 percent compared to the first quarter of the year. Launched in 2022, the tier now accounts for more than 45 percent of signups in markets where the option is available.
Despite the success of its ads strategy, Netflix maintained in a letter to shareholders that it doesn’t expect advertising “to be a primary driver of our revenue growth in 2024 or 2025,” but is confident in its longer-term success.
When asked whether Netflix would consider raising the price of its ad tier, which currently costs $6.99 per month, co-CEO Greg Peters lauded its accessibility but didn’t shut down the possibility, noting that Netflix will approach the plan’s pricing the same way it does for its non-ad tiers.
Expect Netflix to look a little different in the future. The company also revealed that it began testing out a new TV homepage last month that will constitute its “biggest update in a decade” and include more visible title information, more immersive trailers and a simplified navigation bar. “A lot of this is getting to the increase in diversity of entertainment that we are now offering,” said Peters during yesterday’s earnings call, referencing Netflix’s recent pushes into live events and games as influencing a need for structures that allow users to “flexibly go from one type of content and entertainment to another.”
Netflix is also interested in the potential of improving engagement with the help of generative A.I., which Peters described as having “tremendous potential to improve our commendations and discovery systems even further.” Sarandos, meanwhile, said A.I.’s impact on content is hard to predict but noted the technology will provide a “great set of creative tools” for filmmakers and producers.
