Netflix Co-CEO Theodore A. Sarandos highlighted India’s significant potential for growth as the country became the second-largest market for net paid subscriber growth in the second quarter. India contributed notably to the global addition of over 8 million new subscribers.
Sarandos emphasized, “India’s growth is a story that we see around the world playing out very similarly… there’s certainly plenty of room to grow in India as long as we keep thrilling our audiences there,” during the Q2 earnings call.
India also ranked third in percent revenue growth, contributing to Netflix’s total revenue of $9.6 billion—a 16.8% year-on-year increase, the highest in over four quarters.
This growth in India was driven by popular titles such as “Heeramandi: The Diamond Bazaar” and “Amar Singh Chamkila,” alongside licensed films like “Laapataa Ladies” and “Shaitaan.” “Heeramandi,” directed by Sanjay Leela Bhansali, garnered 15 million views, becoming Netflix’s most-watched drama series in India.
Globally, Netflix saw its paid memberships rise by 16.5% year-on-year to 277.65 million from 238.39 million. The company reported a net income of $2.15 billion, or $4.88 per share, for the quarter ending June, up from $1.49 billion, or $3.29 per share, in the same period last year.
Netflix’s advertising business showed substantial growth, with ads tier membership increasing by 34% quarter-on-quarter. The company plans to test an in-house ad tech platform in Canada in 2024, with a broader launch in 2025. Netflix’s ad-supported tier, launched 18 months ago, now accounts for over 45% of all sign-ups in its ad markets.
“Our ad revenue is growing nicely and is becoming a more meaningful contributor to our business,” Netflix stated in its letter to investors. The company expects advertising to be a key component of its long-term revenue and profit growth.
The streaming giant forecasts full-year revenue growth of 14% to 15%, up from its previous estimate of 13% to 15%. For Q3 2024, it anticipates a 13.9% year-on-year revenue growth. However, Netflix expects paid net additions to be lower than Q3’23 due to the impact of paid sharing.
Netflix CFO Spencer Adam Neumann noted that the company expects approximately $6 billion in free cash flow this fiscal year.
With the combined market for streaming, pay TV, film, games, and branded advertising exceeding $600 billion, Netflix currently captures about 6% of that revenue. The company sees its biggest opportunity in capturing a larger portion of over 80% of TV time not yet dominated by Netflix or YouTube.
