Netflix adds 13m+ subs in Q4
January 24, 2024
Netflix added a better-than-expected 13.1 million subscribers in Q4 2023 as it comfortably maintained its status as the world’s leading streaming service.
At year end, Netflix reported 260.28 million total subscribers globally. Revenue in the quarter grew 12 per cent year on year to $8.83 billion (€8.1bn).
In a letter to shareholders, the company said: “We’ve just ended our first year with Ted and Greg as co-CEOs and, under their leadership, Netflix achieved the key financial objectives we set at the start of 2023. […] We believe there is plenty of room for growth ahead as streaming expands, and our north star remains the same: to thrill members with our entertainment. If we can continue to improve Netflix faster than the competition, we’ll have an increasingly valuable business – for consumers, creators and shareholders.”
The letter added: “Looking ahead, despite last year’s strikes pushing back the launch of some titles, we have a big, bold slate for 2024. Audiences will be able to choose from hit returning dramas like The Diplomat S2, Bridgerton S3, Squid Game S2 and Empress S2; unscripted series like Tour de France: Unchained S2, Love is Blind S6, F1: Drive to Survive S6 and Full Swing S2; and brand new shows like 3 Body Problem (based on the best selling novel and from the Game of Thrones showrunners), Griselda (starring Sofia Vegara, which premieres this week), The Gentlemen (from Guy Ritchie), Eric (starring Benedict Cumberbach), Avatar: The Last Airbender, Cien Años de Soledad, from Colombia based on the novel by Gabriel García Márquez and Senna from Brazil. On the film side, in addition to the Rebel Moon sequel, our slate includes Back in Action with Cameron Diaz and Jamie Foxx, Carry On from Steven Spielberg’s Amblin Entertainment starring Jason Bateman and Taron Edgerton, Spellbound from producer John Lasseter, Eddie Murphy reprising his role in Beverly Hills Cop: Axel F, and Six Triple Eight starring Kerry Washington and directed by Tyler Perry.”
“We continue to invest in and experiment with live programming — for example, with the upcoming SAG Awards and Netflix Slam, an exhibition tennis match between Rafael Nadal and Carlos Alcaraz. This will enable us to understand what audiences value most, and how to eventise these moments, as we did with Chris Rock’s stand-up special Selective Outrage in March 2023.”
Paolo Pescatore, TMT analyst at PP Foresight described it as a “Cracking quarter for the world’s leading streamer, noting that Netflix had managed to navigate successfully what was a challenging year for its competitors and was well positioned for a 2024 focused on revenue growth.
According to Pescatore, 2024 promises to be a pivotal year for its ads business as it starts to ramp up efforts. “There are novel ways of engaging with viewers which can provide for more immersive experiences,” he suggests.
He notes that moving forward, the company plans to monetise by leveraging three key areas, pricing, ads and password sharing, with further prices rises possible. “Significantly, people’s appetite to sign up continues to grow which validates the move to generate new revenue from those that have been sharing Netflix passwords,” he says.
The results come on the heels of Netflix announcing a huge partnership with WWE. Speaking on the WWE deal, Oscar Wall – General Manager EMEA at Recurly, said: “WWE’s move to bring live wrestling to Netflix follows the consumer trends we are seeing in the wider subscription industry at Recurly. Across the board, we are seeing an increase in subscription costs—and steps such as this is an example of the value added to this service and represents the evolution of streaming TV. With live events being adopted by more streaming services, we will see consumers moving away from linear TV. Wrestling in particular is known for its strong and dedicated fan base. This decision will expand that community greatly, allowing Netflix to tap into a new audience and its sporting fanaticism.”
According to Pesscctore, the deal is more about franchises such as WWE seeking to drive new audiences, given Netflix’s growing subscriber base. “It allows them to understand their customers better, which in turn opens up new revenue opportunities for all key stakeholders. Sports is one of the few genres that drives higher value and incentivises fans to tune into watching events live,” he notes suggesting there are likely to be more partnerships and licensing deals in this area in an effort to boost revenue.
Responding to Netflix’s Q4, Theresa McEndree, CMO at Recurly, commented: “Netflix’s low churn can be factored to nailing their customer-centric experience model. From the recent password crackdown to offering tailored customer experience and seamless payment mechanics, Netflix is setting the bar high for streaming services. In 2024, successful streaming services will be the ones who prioritise value. Tapping into tiered billing models, especially amid a cost-of-living crisis where streaming services should tailor plans to consumers’ individual needs, such as loyalty-based pricing. This is something that we’re witnessing across the board, with the latest Recurly data shows a 105 per cent increase in active subscribers since 2020. This debunks the misconception of subscription fatigue. Subscriptions are on the rise and they’re here to stay.”
Insider Intelligence principal analyst, Ross Benes, said: “Netflix sticks out as the clear front runner in the streaming wars. Netflix exceeded expectations by adding 13 million global subscribers, including nearly 3 million in the North American market where its audience is most saturated. The subscriber boosts Netflix receives from password sharing will eventually tamper down. Netflix indicated that it plans to sustain its audience demand by furthering its live programming ambitions. Obtaining the rights to stream WWE Raw signals Netflix is serious about live programming. The WWE deal will enhance Netflix’s advertising efforts by generating a sizeable amount of inventory weekly. It will also provide Netflix with another justification to raise future subscription prices.”
Netflix shares surged by more than 6 per cent in after-hours activity the Q4 results.