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SENSOR TOWER · SEEMA SHAH · OCTOBER 2024
Netflix 3Q24 Earnings Results, Advertising Business Update and Broader SVOD App Trends
Sensor Tower data shows that Netflix has become relied on more heavily by a broader swath of advertiser verticals over the past year, cementing its viability as an OTT ad network. While Netflix, Hulu and Paramount+ struggled to grow MAUs both YoY and QoQ in 3Q24, Max and Peacock outpaced their peers with solid double-digit growth, driven by international expansion over the past year and streaming of the 2024 Olympic Games in Paris, respectively.
Key Takeaways:
Netflix experienced solid 3Q24 subscriber and revenue growth in APAC, largely driven by gains in countries such as Japan, where ST data shows that MAUs increased 13% YoY (+9% QoQ) despite recent price increases implemented in the country
Per ST data, Japan outpaced other APAC countries such as Indonesia (+11% YoY), Pakistan (+6% YoY), India (+6% YoY) and Taiwan (+1% YoY) in growing MAUs on a YoY basis in 3Q24, displaying how resilient Netflix can be even in the face of mounting subscription costs
Conversely, Netflix exhibited a QoQ decline (~1%) in reported LatAm paid members as competitive headwinds and a weaker content slate weighed on growth in 3Q24. This was in line with growth in ST MAUs for Netflix in the region (-5% QoQ), though the platform has exhibited a slight rebound through Oct’24 MTD as app MAUs are currently up ~1% MoM
Per ST data, Netflix’s US ad spend share by top verticals has become more evenly distributed across the past year as the top 5 spending verticals in 3Q24 represented 64% of total US ad spend, down from 74% in 3Q23, suggesting that the company doesn’t have to rely as heavily on top advertiser verticals to drive activity as it did last year when it was still ramping up
Netflix has also enhanced its ability to retain individual advertisers, paving the way for expanded partnerships in areas like product placements and live event sponsorships. ST data shows that new advertisers spending on the platform accounted for 47% of Netflix’s total US ad spend in 3Q24, down from 75% in 1Q24
Per ST data, Disney+ MAUs increased 9% QoQ, driven primarily by growth in LatAm, as the company recently sunset Star+ in the region and shifted all content over to Disney+. Max (+26% QoQ) and Peacock (+42% QoQ) saw the most outsized growth in 3Q24 MAUs on a sequential basis, benefiting from an international expansion in Europe and the streaming of the 2024 Olympic Games in Paris, respectively
For more information, request the full report from reports@sensortower.com.
Written by: Seema Shah, VP, Insights
Date: October 2024