I have made a few media appearances over the past 48 hours worth a short read, a short watch, and a short listen:
I will be surprised if anyone can accurately predict what Netflix’s advertising business will look like after Netflix’s Q2 2022 earnings call yesterday.
Chief Operating Officer and Chief Product Officer Greg Peters set the expectations for investors of "an iterative approach" for its advertising model - or " the Crawl, Walk, Run model” - when it launches in early 2023. It announced its upcoming ad-supported tier will start in "a handful of markets where advertising spend is significant."
We got some clarity on the terms of the deal - it is advertising-focused and perhaps will involve gaming (which Peters described as “go-to-market partnerships”). As for a rumored Azure cloud deal, Netflix is “super excited” about its partnership with AWS.
But otherwise, most answers about the Microsoft advertising partnership were buzzword salads about a secret blueprint for a sophisticated, multi-dimensional advertising business that will not launch for another six to nine months.
With marginal clarity on where Netflix's business may be headed after the pandemic, investors are asking: Can Netflix still grow?
I think the simplest answer is, yes. The longer answer is the Q2 earnings call highlighted advertising (above) and four additional solutions for growth:
The other looming question for these four solutions is, will they be enough to get Netflix back on track for its ambitions to be a next-generation Disney? The answer generally seems to be, no.
I thought the most significant news was Netflix’s announcement it will be acquiring the animation studio Animal Logic. The deal will give them “~800 amazing people mostly in Sydney and Vancouver, which will help us accelerate the development of our animation production capabilities ...