Key Points:
- Netflix added eight million new subscribers in Q2, bringing the total to 277.7 million.
- The ad-supported tier reached 40% of all sign-ups in participating countries.
Netflix reported an addition of eight million new subscribers in Q2, driven by the success of its ad-subsidized model. This achievement surpassed analyst expectations, resulting in a total of 277.7 million subscribers. Despite a dip in net profit to $2.1 billion, revenue surged to $9.6 billion. The strategic introduction of an ad-supported tier and password-sharing crackdown significantly contributed to this growth. The company also discontinued its cheapest commercial-free plans in the UK and Canada, expecting further expansions.
In the United States, Netflix began offering joint subscription packages with former rivals such as Peacock and Apple TV. As of May, the ad-supported tier accounted for 40% of all sign-ups in participating countries, up from 23 million in January. The creation of an in-house advertising platform also bolstered its financial performance. While investors have shown optimism, with shares increasing by 38% this year, Netflix cautioned that overall subscriber growth might slow. Nevertheless, the platform maintains its dominance, evidenced by 107 Emmy nominations and high viewership for shows like “Bridgerton” and “Squid Game.”