Netflix scores with sports – Front Office Sports

Even in a period of rapid changes, both internally and externally, the king of streaming still dominates the market.

Netflix’s latest earnings report shows how well it’s maintaining its dominant position in an increasingly sports-centric industry. The company reported an updated subscriber base of 277.7 million for the second quarter, by far the largest base in the sector. The figure was up 3% from 269.6 million in the previous quarter and up 16% from 238.4 million a year ago.

Revenue grew 17% in the quarter to $9.56 billion, while net income rose 44% to $2.15 billion. The company’s ad-supported plan membership grew 34%, underscoring the increasing role of that dual revenue stream going forward. Netflix also raised the low end of its full-year forecast, expecting revenue to grow 14% to 15% in 2024 compared to last year.

Perhaps most notably, the market frenzy that followed Netflix’s April announcement that it would stop disclosing subscriber numbers beginning in the first quarter of 2025 has since abated, if not disappeared altogether. Shares of Netflix closed down 1.5% on Friday at $633.34 apiece, but have risen 14% since its last earnings report in April.

“There was strong performance across the board,” Spencer Neumann, Netflix’s chief financial officer, said on a call with investors. “(There was) good momentum across the business, strong revenue growth, member growth and profit growth. … We’re also getting better at translating improvements in our service into business value.”

Netflix’s ‘event model’ around sports

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

“We’re live (content) because our members love it, it drives a lot of engagement, it drives a lot of excitement,” Netflix co-CEO Ted Sarandos said. “Those things are incredibly valuable. The great thing is advertisers love it too, and they love it for the exact same reason.”

More recently, Tom Brady’s Roast drew what Netflix described as its “largest live audience to date,” with 22.6 million views. It’s all part of a broader push by Netflix to create a slate of big events on its platform that allows the company to operate in sports but still avoid the larger, more expensive rights investments it has long resisted.

“If you offer (leagues) this event model that we’re building on, we’re very excited about our opportunity to do that without the (financial) risk that you’re talking about,” Sarandos said.