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SENSOR TOWER · SEEMA SHAH · JULY 2024
Netflix Q2 2024 Advertising and Mobile App Trends
Netflix's shares fell slightly despite beating 2Q24 street estimates, with 3Q24 guidance indicating a slowdown in growth. Per Sensor Tower data, Netflix leads its peers in user base size, retention, and engagement on mobile, but lags behind entertainment giant YouTube in hours engaged per day.
Key Takeaways:
Despite heightened competition for consumer attention from both other SVOD players and short-form video platforms, Netflix’s tentpole content still propels a significant amount of consumer attention and presumably subscriber re-engagement. Per Sensor Tower estimates, US user time spent on Netflix jumped 10% WoW during the week that Bridgerton Season 3 Part 1 premiered
The return of Bridgerton also drove a spike in returning mobile app users, and presumably, subscribers, as the number of return mobile app users on Netflix in the US increased a whopping 21% MoM (+4% YoY) in May’24, per ST data
Netflix noted strong 2Q24 subscriber growth in India, largely in line with ST data. Driven by the release of hit content such as Amar Singh Chamkila, Netflix 2Q24 app downloads and MAUs in India increased 14% YoY (+18% QoQ) and 10% YoY (+8% QoQ), respectively. Although this user growth in India is encouraging and additive to total global paid subscriber figures for Netflix, it is likely much lower on an ARM (average revenue per membership) basis compared to Western markets and less accretive to top line growth
Per ST data, 57% of Netflix’s US ad spend was from new advertisers (or those who hadn’t advertised at all on the platform in 2Q23) in 2Q24 vs 75% in 1Q24, which indicates that it has cemented a base of regular advertisers with its ad platform offerings, providing growth in higher-margin recurring ad revenue
This may bode well for expanding ad partnerships with top brands as the company can launch more personalized ad experiences or product placement deals with these brands
Per Netflix Co-CEO Ted Sarandos, it appears that YouTube is the streaming giant’s largest competitor for consumer attention. This was largely in line with ST data as US YouTube users on mobile spent 196mn hours/day on the platform in 2Q24, more than 35x that of Netflix (5.5mn)
For more information, request the full report from reports@sensortower.com.
