During the second quarter earnings call for Netflix in 2025, company executives discussed that the performance growth was mainly driven by foreign exchange fluctuations, while also emphasizing the healthy growth in membership and strong momentum in advertising sales. They explained the reason for increasing the full-year revenue forecast to $448 to $452 billion, attributing it to the weakening US dollar and improvements in business fundamentals. In addition, executives also mentioned the expected increase in content costs in the third and fourth quarters, explaining why the full-year operating profit margin guidance is 30%, despite the higher forecasted profit margins in the second and third quarters.

Netflix expects to have a heavier release schedule for films in the fourth quarter, while continuing to build its advertising sales infrastructure and capabilities. Despite anticipating increased investments and expenses in the second half of the year, Netflix still expects its operating profit margin to increase year-over-year for each quarter, including the fourth quarter. They are also closely monitoring consumer sentiment and macroeconomic conditions, but have not yet observed significant changes in business metrics such as user retention rates, plan combinations, and engagement, with overall performance remaining stable. In addition, Netflix mentioned that its early advertising negotiations in the US are progressing smoothly, with deals reached with most major agencies, meeting or slightly exceeding expectations, with the goal of doubling the scale of its advertising business this year. Advertisers have shown strong interest in Netflix's high level of attention and engagement, the launch of its own advertising technology stack, and the variety of programs and live events.

Netflix has successfully launched its own advertising technology stack and advertising suite in the global market, receiving positive performance feedback that met expectations. Advertisers have found the purchasing process more convenient, leading to increased sales performance and programmatic purchases. Netflix plans to further optimize the advertising experience by introducing more demand sources, enhancing advertising targeting and measurement capabilities, and utilizing third-party data sources. Additionally, they will introduce interactive advertising features in the second half of the year to achieve more personalized ad displays, enhance user experience and brand benefits.

During the discussion, it was mentioned that although the total number of hours viewed has increased in the first half of the year, the engagement seems to be declining on average per member basis. The company mainly focuses on engagement based on owner households to eliminate the influence of borrowed users, considering it the best way to evaluate the engagement of each member. Despite facing competition pressure and challenges brought by the shift in viewing habits towards streaming media, the company is maintaining a relatively stable level of engagement. Looking to the future, the company is optimistic about the lineup of strong programs in the second half of the year, including "Squid Game 3," "Wednesday," and "Stranger Things," etc., expecting these programs to boost engagement and content growth.

Netflix is accelerating its transformation from linear media to streaming media, attracting and retaining users by continuously releasing high-quality films, TV series, and games. The company plans to release a series of highly anticipated films and television shows in 2026, including "Happy Gilmore 2," a new "Knives Out" movie, and works from renowned directors. In addition, popular series like "Stranger Things," "Bridgerton," and "Avatar" will return, along with new series and reimagined classics from around the world. Netflix will also expand its content in non-scripted programs and live sports, including NFL Christmas doubleheaders. These initiatives reflect Netflix's determination to expand content scale and improve quality on a global scale.

In the face of stagnant domestic market share, Netflix emphasizes that its long-term goal is to continue growing market share, despite facing competition from free and paid streaming services and the impact of account sharing. The company points out that since 2020, its content investment has grown by over 50%, from $11 billion to $16 billion, accompanied by improvements in user engagement, revenue, profit, and profit margins. Netflix's strategy is to drive growth and profitability globally through continuous improvement of services, increased content spending, and expanding entertainment offerings.

Discussed the reasons for choosing TF1 as a broadcasting partner in France, emphasizing the current opportune timing for establishing this partnership and exploring the possibility of similar collaborations in other countries in the future. Explained the rationale for the partnership, hinting at its expansion strategy in the global market.

Netflix has chosen to partner with France's leading television station TF1 in order to meet the diverse and wide-ranging content needs of its global members. The goal is to accelerate the provision of content that is highly relevant to the local audience in France. Additionally, in the face of competition from companies such as Apple, UFC, MLB, and NFL in the sports rights market, Netflix has also shared its strategy and considerations regarding sports rights.

The company emphasizes that its live streaming strategy is not limited to sports, but is more focused on groundbreaking events that have significant impact and are economically viable. Although live streaming accounts for a small proportion of content spending and viewing time, it has a significant positive impact on user interaction, acquisition, and retention. The company is satisfied with its existing strategy, including upcoming boxing matches, film awards, WWE matches, and NFL events, especially the Christmas doubleheader. In the future, the company will expand its investment and capabilities in global live events, not just in the US market.

Netflix shared its investment and progress in enhancing its live event production capabilities, emphasizing the shift from relying on external partners to partial internal production. It also highlighted the importance of partnerships with companies like CBS in producing major events such as NFL games. In addition, Netflix showcased its significant advancements in live streaming technology and future development plans through recent successful live events like Taylor vs Serrano and WWE Smackdown.

The conversation discussed the huge success of the Netflix original animated movie "Kpop Demon Hunter", especially emphasizing its breakthrough in original animation and the fusion of music and pop culture. The movie not only achieved great success in the animation field, but its music also received immense success, including the songs "Golden" and "Soda Pop", which have all contributed to the movie's cultural impact, showcasing Netflix's innovation and success in the original animation field.

Netflix is expanding its content types, including live sports and collaborations with TF1, which has sparked discussions about the possible introduction of additional service tiers based on content type. The company has stated that it is willing to continue evolving its consumer service model while ensuring member choice, global accessibility, and reasonable business returns. While the current emphasis is on value, simplicity, and a wide range of entertainment content, future considerations may include more pricing points and features to meet the diverse needs of users and support the company's ongoing investment and growth.

Netflix is launching a new UI/UX designed to better adapt to the evolution of its business, including a wider range of entertainment options, globalized film and television content, games, and live events. The new interface not only improves the speed at which users can find titles and reduces the number of failed sessions, but also utilizes new technologies such as real-time recommendations to dynamically adjust recommended content based on the user's needs at different times. This marks a shift for Netflix from its previous anytime entertainment model to a new model that guides users to watch specific content at specific times, better meeting the needs of its business development.

Netflix expresses willingness to collaborate with outstanding content creators from around the world, including those who are active on YouTube, believing that this can bring a wider audience and content diversity to the platform. Despite YouTube surpassing Netflix in TV viewing time, there are differences between the two, as not all YouTube content is suitable for Netflix. Netflix emphasizes that they are actively competing for the 80% of TV viewing time that currently does not belong to either Netflix or YouTube, in order to expand market share, especially in higher-profit content areas.

Generative AI has shown great potential in Netflix's film and television production, especially in increasing efficiency and reducing costs. Through AI-powered tools, creators can achieve more efficient workflows in pre-visualization, shot planning, and visual effects. For example, in popular shows in Argentina, Netflix used AI technology to quickly complete a building collapse scene that traditional VFX tools would struggle with. This not only increased speed tenfold, but also significantly reduced costs, making high-cost effects possible within a limited budget. The application of this technology not only improves production efficiency, but also expands the possibilities of storytelling, bringing audiences a more immersive visual experience.

The dialogue emphasizes the immense potential of new technology in enhancing user experience, personalized recommendations, and innovation in content creation. By introducing natural language dialogue functionality, the interaction between users and platforms has been improved, allowing users to more accurately find their favorite movie genres. In addition, the discussion also mentions lowering the barriers for brand promotion through these technologies, bringing innovation to the advertising field, and further optimizing the benefits of user experience and creator communities through data analysis and economies of scale.

Netflix is currently exploring commercial opportunities in the gaming industry with its ambitious collaborations, such as partnerships with Grand Theft Auto and Roblox. They believe that by offering more value, they can increase user acquisition, retention, and willingness to pay, thereby driving the fundamentals of their core business. While gaming investments are currently smaller compared to overall content investments, Netflix plans to increase their investment to expand its positive impact. They have made progress in licensing and producing games, and will introduce more interactive experiences in the future, while remaining open to the evolution of business models. Netflix firmly believes in the huge potential of the gaming market and is confident in its strategic opportunities.

In the discussion, the spokesperson emphasized that Netflix is cautious about the possible wave of mergers and acquisitions in the media industry in the future, believing that although the continued integration of media and online assets may continue, it will not fundamentally change the competitive landscape. They stated that Netflix is more inclined to develop its business through organic growth rather than acquisitions, emphasizing an interest in successful intellectual property (IP) and studio assets. However, they also indicated that they are not interested in owning traditional media networks, which would reduce their content channels. Overall, Netflix will focus on organic growth, while also returning excess cash to shareholders through stock buybacks.