Netflix Q2 2023: Earnings Notes and Biggest Kids News Takeaways

XO, Kitty and Nimona were among the highlights for the quarter.

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xo kitty netflix earnings notes q2 2023

XO, Kitty was one of the highlights of Q2 2023 – Picture: Netflix

Netflix Q2 2023 earnings are now out and the vibe was mostly positive. Success in paid sharing and steady growth in advertising “over time” were key discussion areas.

Netflix seems to feel that they’re pacing ahead of their more beleaguered competitors. Deeper cut of this chaff from a Wall Street perspective is over with Ian Whittaker, and despite the good vibes, the share price was down. Very little talk overall of gaming though; is their comfortable position perhaps cooling the need for that narrative?

Earnings season drops in the midst of escalating actors and writers strikes. This halt in production represents a saving and more free cash flow at Netflix for now, though Ted Sarandos very much front-lined the current situation as not ideal for anyone.


Other Developments for Q2 2023

Top 10 Hours Viewed Metrics Change

Last month Netflix announced a change in how they would report Global Hours Viewed going forward. They are now basing the ranking on “views” rather than “hours viewed.” Don’t be fooled, there is no extra data here. Netflix will do the math for you, taking the total hours viewed and dividing by title run time. This is despite the streamer actually knowing how many views the content had.

Fellow What’s on Netflix contributor and data nerd Frédéric Durand has been a fan of this approach for a long time. So much so that he was doing it before Netflix were. For me, it’s not something I’d favor with kids titles. We all know our young audiences watch and rewatch films and series. They even rewatch certain episodes (Hello, anything seasonally themed, particularly Christmas/Halloween) and even sections (Hello, opening 20 minutes of Vivo that has the three most banging tunes which I’ve seen at my son’s behest a zillion times).

One segment it will help is titles with shorter durations—think comedy specials. The downside is that the subtle change in ranking criteria poses a problem when comparing Top 10 positions pre the change with those post the change. An intentional sleight of hand to keep profound understanding of content performance just out of reach? Oh no, not Netflix.

The second part of this change focuses in on the all-time most popular series and movies based on views. As well as this new metric, the ranking now looks across 91 days rather than the 28-day benchmark used previously. That’s, of course, good for kids content, and there was an interesting development here. We Can Be Heroes, a ruddy live-action superhero movie from late 2020, bounced in on this basis.

Netflix Top Movies Jul 2023

Source: Netflix

It was directed by Robert Rodriquez of the Spy Kids franchise and casually featured talent including Pedro Pascal, Priyanka Chopra Jonas and Christian Slater. The title’s US Nielsen Streaming Content Ratings performance in Christmas 2020 came out of nowhere to jostle underneath Soul for a few weeks.


Chris Nee No Longer at Netflix

And she was as frank as you might expect when talking to The Hollywood Reporter. Algorithm woes were something she mentioned specifically. If you can’t surf the algorithm as Chris Nee from the inside, what hope do you have from the outside? I recently ran analysis that included her series Ridley Jones, using Digital i data. Add short season orders to the list of streaming-specific tactics that could also do with cancelling. Preschool content in particular needs time to bed in.


Kids Content Performance in Q2 2023

Kids Series Highlights for Netflix Q2 2023

These remain bereft—sorry, you guys. Sonic Prime season 2 snuck into the ranking in this very last week. Season one had previously ranked for three weeks, doing much higher numbers. Scraping the barrel, the 2021 Smurfs series also managed number 10 for a week. Go Smurfs!

In teen content, new series of both Sweet Tooth and Never Have I Ever brought older seasons back in. By my poll the youngest-skewing series to launch, XO, Kitty had a strong start. It’s a spin-off of the To All The Boys films series. Common Sense Media has it at a 12+, and the K-pop aesthetic had real accessibility to younger-audiences. It was referenced in the earnings letter as a good example of the content range the streamer aspires to.


Kids Movie Highlights for Netflix Q2 2023

On kids films, live-action movie Chupa had a low-key four-week run. This one was subject to some controversy about the slang meaning of the title.

On animation Originals, Nimona saw the light of day after a long journey. Based on a graphic novel, the story has warm, underdog, non-conformist anti-heroes, pacy quips and a same-sex relationship. It was brought on as a feature production by Blue Sky Studios, owned by Fox. After Fox’s acquisition by Disney, the fully-in-production feature was shelved in 2021. This was amidst a hurricane of tensions at Disney relating to meaningful LGBTQIA+ representation and support at the company, as former CEO Bob Chapek fumbled handling of the “Don’t Say Gay” bill in Florida. Annapurna and Netflix resurrected the project.

Nimona came in slow in Week 1, and low overall, though as Ryan Faughnder from the LA Times points out, it’s not exactly as broadly skewing as Angry Birds 2. Here’s how it stacked up against other animated Originals.

Nimona vs other Netflix Animated Originals

The week-on-week numbers tell a story though, also pointed out by Frédéric Durand. The percentage hold is impressive, in fact higher than any other Netflix animated Original.

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nimona vs other netflix original animation movies

One thing that was very apparent in animated movies is the strength that legacy theatrical movies continue to have. The following titles hit the Netflix Global Hours Viewed Top 10 over the course of the quarter, many across multiple weeks. Bear in mind that licensing for these films will be fragmented across markets, so they’re dominating globally despite not being on Netflix in every country.

  • PAW Patrol: The Movie
  • The Boss Baby
  • Kung Fu Panda 3
  • The Croods
  • Sing 2
  • Seuss’ The Lorax
  • Shark Tale
  • Home
  • Trolls World Tour
  • Trolls
  • Puss in Boots: The Last Wish

Puss in Boots: The Last Wish is another first Pay window of the theatrically released movie from last year and is worth further unpacking in a future newsletter.


What’s Coming Next on Netflix Kids for Q3 2023

Plenty! On the series front, Supa Team 4, Netflix’s first African animated Original, dropped this week and 3D series Mech Cadets launches next month.

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There’s also season 8 of Gabby’s Dollhouse waiting to hit.

In movies, Miraculous: Ladybug & Cat Noir, The Movie arrives in the majority of markets on July 28th and animated Original The Monkey King just dropped a trailer ahead of its August 18th debut.

And we’re still waiting on Leo and Chicken Run: Dawn of the Nugget before the year is out.

Bringing it back to live-action movies, there was talk of Spy Kids: Armageddon hitting Netflix before the end of the year. Given the success we can now see on We Can Be Heroes, and the sleeper performance for titles like Chupa, you can’t help but think there’s an opportunity at Netflix for more right-sized live-action kids films.

Author What's on Netflix avatar

Emily is an independent media consultant. She has a background in television, driving content distribution strategies for kids IP that support success across businesses including consumer products, publishing and gaming. For What's on Netflix, Emily covers Netflix's kids library, content strategy, and recaps quarterly earnings reports.