- tech360.tv
Netflix Smashes Fourth-Quarter Subscriber Record, Driven by 'The Crown' and 'The Killer'
Netflix adds 13.1 million subscribers in Q4, surpassing expectations. Revenue rises to US$8.8 billion, exceeding forecasts. Company aims to make advertising a primary revenue driver by 2025.
In a stunning victory, Netflix has surpassed Wall Street's expectations for subscriber growth in the fourth quarter. The streaming giant added a whopping 13.1 million subscribers, far exceeding the projected gains of 8.97 million. This surge brings Netflix's total number of subscribers to a staggering 260 million.
The success can be attributed to a strong lineup of shows, including the final season of the beloved royal drama "The Crown" and the highly acclaimed original film "The Killer" by David Fincher. These captivating offerings have captivated audiences worldwide and propelled Netflix to new heights.
Following the announcement, Netflix shares soared by 8.3% in after-hours trading, capping off a remarkable year where the stock gained an impressive 65%.
Bank of America media analyst Jessica Reif Ehrlich commented, "It is becoming increasingly clear that Netflix has won the 'streaming wars.'" This statement reflects the industry's recognition of Netflix's dominance in the streaming landscape.
While Netflix fell slightly short of consensus estimates for per-share earnings, reporting US$2.11 instead of the expected US$2.22, the company's revenue rose to $8.8 billion, surpassing both forecasts and its own guidance of $8.7 billion for the quarter.
Looking ahead, Netflix anticipates healthy double-digit revenue growth for the full year of 2024. The company plans to continue expanding its membership base and investing in its advertising business. Although advertising currently plays a minor role in revenue generation, Netflix aims to make it a primary driver by 2025.
Netflix attributes its success to a range of factors, including the strength of its intellectual property. Popular shows like "Squid Game: The Challenge," reality series based on its most-watched TV show, and new original series like "All the Light We Cannot See" have resonated with audiences. Additionally, the streaming giant's non-English-language programming, such as the third season of "Lupin" from France, has garnered significant attention.
The company also highlighted the demand for licensed titles like "Young Sheldon." Co-CEO Ted Sarandos expressed enthusiasm about licensing deals, stating, "I am thrilled that the studios are more open to licensing again, and I'm thrilled to tell them that we are open for business."
Bank of America's Ehrlich noted that Netflix benefits from changing market dynamics, as media companies reconsider their strategy of exclusive content for their own streaming services. This shift allows Netflix to reduce its investment in high-risk original production while providing other companies with much-needed revenue.
Netflix sees further growth opportunities by improving its programming slate and venturing into new areas like advertising and games. The company reported a significant increase in engagement with its games business, which is still in its early stages.
Chief Financial Officer Spencer Neumann revealed plans to increase content spending, with an expected investment of up to US$17 billion this year. However, Neumann emphasised the importance of responsible financial decisions.
In a move to diversify its content strategy, Netflix announced a groundbreaking deal with TKO Group Holdings to exclusively stream World Wrestling Entertainment's "Raw" and other programming starting in January 2025. This partnership marks Netflix's largest foray into live programming and showcases its commitment to expanding its offerings.
Netflix's triumph in the fourth quarter demonstrates its unwavering position as the streaming industry leader. With a robust lineup of captivating shows and a strategic focus on growth, Netflix shows no signs of slowing down.
Netflix adds 13.1 million subscribers in Q4, surpassing expectations
Revenue rises to US$8.8 billion, exceeding forecasts
Company aims to make advertising a primary revenue driver by 2025
Source: REUTERS