Netflix is the only streaming service that works in the "traditional" way, making it the undisputed winner of the streaming wars.
Netflix reported better-than-expected subscriber growth for its second operative quarter of 2024, proving once again to be the leading company in the streaming sector. The entertainment giant also reported quarterly revenues and profits.
Subscribers rose by 9.3 million, bringing the worldwide total to 270 million. This makes Netflix the world’s most popular streaming service, with Amazon Prime Video in second place at 200 million. Prime Video, however, comes attached to Amazon’s Prime services, meaning not every subscriber is also necessarily an active user.
Revenues for the streaming giant came in at $9.37 billion, a 15% increase year-on-year. Profits amounted to $2.2 billion for the quarter. Netflix is the only major streaming service that manages to turn a profit.
In its earnings report, Netflix also said the company will stop posting subscriber numbers from 2025. Subscriber growth does not represent a major indicator of growth anymore, the company said in the statement.
“As we’ve noted in previous letters, we’re focused on revenue and operating margin as our primary financial metrics — and engagement (i.e. time spent) as our best proxy for customer satisfaction,” the statement reads. “In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential.”
The end of the streaming wars
When compared to its major rivals, this quarterly report proves Netflix won the streaming wars, and is now focused on maintaining its leading position. The decision to stop posting subscriber numbers comes with the realization that growth will inevitably slow down and that profits will be found elsewhere.
“Streaming wars” is a colloquial expression referring to the post-pandemic years, when most Hollywood majors tried challenging Netflix by opening their proprietary platforms. Four years later, Netflix emerged victorious.
After over a decade of trying, Netflix finally turns a constant profit. They massively increased revenues by introducing an ad-based subscription tier and cracked down on password-sharing profiles.
Netflix’s main rival, Disney+, also tried similar strategies but failed to turn a profit. Analysts believe that’s because of Netflix’s vast global presence, with a foot in virtually every nation’s film industry.
Disney+ will introduce cable TV-like channels: ad-based digital spaces where programs circulate 24 hours a day. It’s unclear whether this will finally make Disney+ profitable, but Disney CEO Bob Iger promised to make money out of streaming by year’s end.
Other Hollywood majors also introduced streaming channels, like Paramount’s Pluto TV. The only streaming service that works in the “traditional” way seems to be Netflix, with each quarterly earnings report proving it.
