Welcome to the latest installment of Dan Rayburn's Streaming Insights & Intelligence, a weekly insights column on StreamTV Insider where the industry analyst puts facts and figures to the news you need to know about. Join the discussion on LinkedIn and check back each week as he unpacks key industry happenings.
Here’s Rayburn’s key news recap for the week of April 24, 2024: Netflix and Verizon earnings; new sports streaming additions; Vimeo’s latest hire.
Netflix Q1 2024 earnings
The company added 9.33 million subscribers (global sub count of 269.6M) and had free cash flow of $2.21 billion with revenue growth of 15%, YoY. Average Revenue per Member (ARM) rose 1% YoY and over 40% of all signups in Netflix's ads markets came from their AVOD plan. Netflix forecasts Q2’24 revenue growth of 16% and is still forecasting full year 2024 free cash flow of approximately $6B, assuming no material swings in F/X, and cash content spend of up to $17B.
Starting next year with Netflix's Q1'25 earnings, the company will stop reporting quarterly membership numbers and ARM saying, "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. In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential. But now we’re generating very substantial profit and free cash flow (FCF). We are also developing new revenue streams like advertising and our extra member feature, so memberships are just one component of our growth. In addition, as we’ve evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact. It’s why we stopped providing quarterly paid membership guidance in 2023 and, starting next year with our Q1'25 earnings, we will stop reporting quarterly membership numbers and ARM.”
Verizon Q1 2024 earnings
Verizon lost 68,000 residential pay TV customers to end the quarter with 2.88 million residential pay TV subs, down from 3.16 million residential pay TV subs year-over-year. When does Verizon completely exit the pay TV business? With such a low sub number that continues to drop each quarter, it’s only a matter of time before it no longer makes sense for Verizon to offer pay TV services. I would expect them to offer more YouTube TV bundles, which they already offer for Wireless and Home Internet plan customers.
News roundup
- The NYT reports that Apple is nearing a deal with FIFA for worldwide television rights for its new Club World Cup, a tournament that will be played every four years. The month-long competition will be played for the first time in the US in the summer of 2025 if FIFA can pull it off in time. FIFA had hoped to secure major sponsorship partners, but with little more than a year to go, no title partners have been announced for the event.
- Disney+ has secured exclusive broadcast rights to the UEFA Europa League and UEFA Conference League in Denmark and Sweden, and it is penning a three-year agreement starting next season. All matches from the second and third-tier European club soccer competitions will be available to Disney+ subscribers at no extra cost until the conclusion of the 2026/27 campaign. In total, 342 games across 19 match weeks will be offered.
- Plex has partnered with the NFL to stream their FAST NFL Channel. The partnership will kick off just in time for football fans to watch the NFL Channel on Plex for nonstop coverage of the 2024 NFL Draft from Thursday, April 25, through Saturday, April 27. The FAST channel will feature news, highlights, live Game Day coverage, NFL game replays, original content from NFL Media and NFL Films library, and an always-on channel ticker with year-round NFL news coverage. The company also announced that it now offers over 1,000 free-to-stream live TV channels with over 800 free FAST channels in the U.S.
- Vimeo has hired Philip Moyer as their new CEO, replacing interim CEO Adam Gross. Philip previously served as Global VP of Applied AI Engineering and Business Development and VP of Strategic Industries at Google Cloud. Before Google, he was a Director of Financial Services at Amazon Web Services, managing Banking, Capital Markets, Insurance and Payments. As part of his employment, he will receive an annual base salary of $600,000, a one-time sign-on bonus of $300,000 and be granted 1,680,439 restricted stock units pursuant to the Company’s 2021 Stock and Annual Incentive Plan.
Dan Rayburn is an analyst in the streaming media industry, with regular TV appearances on CNBC, Bloomberg TV, and Schwab Network amongst others. He is conference Chairman for the NAB Show Streaming Summit in Las Vegas each year, and his streamingmediablog.com website is one of the most widely read sites for broadcasters, content owners, OTT providers, Wall Street money managers, and industry executives. He also has a podcast at danrayburnpodcast.com. He can be reached at [email protected]
Dan Rayburn’s Streaming Analysis & Insights is an opinion column. It does not necessarily represent the opinions of StreamTV Insider