Netflix Reigns Supreme: NFL Deal, Robust Earnings Highlight Q2 Report

Even in a period of accelerating change both internally and externally, the king of streaming still rules the market.

Netflix’s latest earnings report shows the extent to which it is maintaining its industry dominance, with sports increasingly at the center of that position. The company reported an updated subscriber total of 277.7 million for the second quarter, by far the largest such base in the industry. The figure is up 3% from 269.6 million in the prior quarter and up 16% from 238.4 million a year ago. 

Revenue grew 17% in the quarter to $9.56 billion, while net income increased 44% to $2.15 billion. The company’s members with ad-supported plans grew by 34%, showing the increasing role of that dual-revenue stream in its future. Netflix additionally raised the low end of its full-year guidance, and it expects 2024 revenue to grow by 14% to 15% from last year. 

Perhaps most notably, the market unease stemming from Netflix’s April announcement that it will no longer disclose subscriber numbers beginning with 2025’s first quarter has since eased, if not dissipated altogether. Shares in Netflix closed Friday down 1.5% to $633.34 each, but have increased 14% since the prior earnings report in April. 

“There was strong performance across the board,” Netflix chief financial officer Spencer Neumann said on an investor call. “[There was] good momentum across the business, strong revenue growth, member growth, and profit growth. … We’re also continuing to get better and better at translating improvements in our service into business value.”

Netflix’s ‘Event Model’ Around Sports

Perhaps the biggest news for Netflix during the quarter was the company’s three-year deal with the NFL to show exclusive Christmas Day games, beginning with a doubleheader this year. But sports-related programming continues to be a growing driver for the company, including a major deal in January with WWE for its weekly flagship show, Raw.

“We’re in live [content] because our members love it, it drives a ton of engagement, and it drives a ton of excitement,” said Netflix co-CEO Ted Sarandos. “Those things are very valuable. So the good thing is that advertisers like that, too, and they like it for the exact same reason.”

More recently, The Roast of Tom Brady attracted what Netflix described as its “largest live audience yet,” with 22.6 million views. It’s all part of a broader push by Netflix to create a series of big events on its platform that allow the company to operate in sports, but still avoid the bigger and more costly rights investments that it has long resisted.

“When you offer [leagues] this event model that we’re building on, we’re really excited about our opportunity to do that without the [financial] risk that you’re talking about,” Sarandos said.