“It’s definitely the end of linear TV over the next five to 10 years,” Hastings said while discussing Netflix’s financial and subscriber results on the pre-recorded Q&A, which came on the heels of the reveal that the streamer lost 970,000 subscribers in Q2. That loss was actually a win for Netflix, which had originally expected to lose 2 million subscribers by the end of June 30.
Though very bold, Hastings’ thoughts on the state of linear television are hardly a shock given his position at the top of the world’s biggest streamer — and they carry forward data touted by Netflix earlier on Tuesday.
In a letter to shareholders breaking down its Q2 performance, Netflix wrote “in the U.S., which is one of the most competitive markets in the world, we drew more TV viewing time than any other outlet during the 2021-22 TV season nearly matching the combined total of the two most watched broadcast networks.” He added: “And, as Nielsen will announce on Thursday, our share of U.S. TV viewing reached an all-time high of 7.7% in June (vs. 6.6% in June 2021), demonstrating our ability to grow our engagement share as we continue to improve our service.”
See the chart published in Netflix’s Q2 earnings report, data cited to Nielsen, at the bottom of this post.
Also during the Q2 interview, Netflix execs gave an update on the streamer’s cash content spend plan as it continues to make budget-conscious choices while looking to rebuild its market cap. Chief financial officer Spencer Neumann said cash content spend for 2023 will be at “similar levels” as this year, noting that Netflix actually expects to end 2022 having spent around $17 billion on content, rather than its previously forecast $18 billion.
Netflix plans to launch its cheaper, ad-supported option in early 2023. The streamer has struck an exclusive pact with Microsoft to help build out that tier, promising it won’t resemble advertising on broadcast TV.
“We’re optimistic that over a couple of years we can deliver an experience that is fundamentally different than the advertising experience on linear networks in a way that fundamentally benefits all the stakeholders,” Netflix chief product officer and chief operating officer Greg Peters said during the earnings interview.