\n
Netflix may have had its \u201cbest ad-sales quarter ever,\u201d but its Q3 was not entirely smooth sailing.<\/p>\n
The streamer missed Wall Street expectations, registering a lower-than-expected operating margin due to a dispute with Brazilian tax authorities, Spence Neumann, Netflix CFO, said Tuesday on the company\u2019s earnings call.<\/p>\n
\u201cIt\u2019s a unique tax,\u201d Neumann said. \u201cNo other tax looks or behaves like this in any other major country in which we operate\u2026Absent this expense, we would have exceeded our Q3 \u201925 operating income and operating margin forecast, and we don\u2019t expect this matter to have a material impact on our results going forward.\u201d<\/p>\n
Tax dispute aside, the streamer reported a 17% increase in revenue in the quarter, with the same YoY growth in revenue in the United States and Canada. It also registered its highest quarterly view share ever, a measure of platform engagement, in both the US and the UK.<\/p>\n
Baby steps:<\/strong> Netflix\u2019s ads business grew in Q3, according to Greg Peters, Netflix co-CEO. Beyond its best ad sales quarter to date, the streamer expects to more than double its ads revenue this year. Netflix previously announced in August that its US upfronts commitments had doubled.<\/p>\nAs its ad business continues to grow, it\u2019s infusing AI into its ad biz, too. The streamer is testing ad formats with AI to help with ad creative and placement, as well as to speed up media plan creation, Peters said.<\/p>\n
\u201cWe made considerable progress in building out our general capabilities in the ad space,\u201d Peters said. \u201cIf you use our beloved crawl-walk-run model, we\u2019re now squarely in that walking phase.\u201d<\/p>\n
AI is also being used in other parts of Netflix\u2019s business, including in content recommendations, through localizing promotional assets for different markets, and offering creators access to GenAI tools to assist in content creation. (In the shareholder letter, the company noted that \u201cin Happy Gilmore 2<\/em>, filmmakers used GenAI coupled with ML and Eyeline\u2019s proprietary volumetric capture technologies to de-age characters in the opening scene.\u201d<\/p>\n\n
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Grab some popcorn:<\/strong> As is typical in its shareholder letter, Netflix highlighted some of its biggest TV shows and movies in the quarter, including the sophomore season of Wednesday<\/em> and the mega-hit kids\u2019 movie KPop Demon Hunters<\/em>. The movie, Netflix\u2019s most popular film ever, has proven to be so successful that the streamer is partnering with Hasbro and Mattel to create more toys and games tied to the title.<\/p>\nLooking ahead, Netflix has a stacked content roster, including Guillermo del Toro\u2019s Frankenstein<\/em> and Rian Johnson\u2019s Wake Up Dead Man: A Knives Out Mystery<\/em>, not to mention new seasons of Nobody Wants This<\/em> and The Diplomat<\/em>. On the sports side, it will present a live boxing match featuring Jake Paul and Tank Davis in November, following it up with two NFL Christmas Day games. Some video podcast content is also coming to Netflix beginning next year through a partnership with Spotify announced earlier this month.<\/p>\nWhether Netflix will expand its content roster through more ambitious M&A, or whether it\u2019s seriously eyeing the for-sale sign in front of Warner Bros. Discovery, is anyone\u2019s guess. Peters noted that it\u2019s \u201cour responsibility to look at every significant opportunity\u201d when asked about M&A opportunities, while co-CEO Ted Sarandos was even more muted in his remarks.<\/p>\n
\u201cWe\u2019ve been very clear in the past that we have no interest in owning legacy media networks, so there\u2019s no change there,\u201d Sarandos said on the call. \u201cBut in general we believe that we can be, and we will be, choosy. We have a great business; we\u2019re predominantly focused on growing organically.\u201d<\/p>\n<\/div>\n
Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Netflix may have had its \u201cbest ad-sales quarter ever,\u201d but its Q3 was not entirely smooth sailing. The streamer missed Wall Street expectations, registering a lower-than-expected operating margin due to a dispute with Brazilian tax authorities, Spence Neumann, Netflix CFO, said Tuesday on the company\u2019s earnings call. \u201cIt\u2019s a unique tax,\u201d Neumann said. \u201cNo other […]<\/p>\n","protected":false},"author":1,"featured_media":22768,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[78],"tags":[],"class_list":{"0":"post-22767","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-marketing"},"yoast_head":"\n
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