Streaming giant Netflix gained 13.1 million subscribers during the last quarter of 2023, marking the third consecutive quarter of increasing user numbers.
The California-based company revealed this growth during its Q4 2023 earnings results, which showed it continues to appeal to users despite increased streaming costs and a crackdown on password sharing.
Netflix Surpasses 260 Million Subscribers Globally
Netflix had more than 260 million subscribers globally by the end of 2023, representing a yearly increase of nearly 30 million subscribers.
Netflix adds 13.12 million new subscribers in Q4 2023!
There are now 260.28 million Netflix subscribers globally! pic.twitter.com/AHDm6RlnVT
— What’s on Netflix (@whatonnetflix) January 23, 2024
The company’s performance in 2023 is a stark contrast from 2022. In 2022, Netflix subscribers increased by 8.9 million. At the time, there were concerns that the streaming platform was losing popularity due to increased competition.
One of the likely reasons behind the 2023 growth in subscriber numbers is the low-priced ad tier. Netflix introduced commercials to its service for the first time while blocking users’ ability to share passwords.
The ad tier costs $6.99 per month in the US, significantly lower than the standard plan, which costs $15.49. Earlier this month, Netflix said its advertising tier had 23 million monthly active users.
While the reduced costs have attracted more users, the streaming giant might consider raising the subscription costs to maximize profitability. In a shareholder letter, the company revealed it would occasionally raise costs to expand its investments and improve its offerings.
“As we invest in and improve Netflix, we’ll occasionally ask our members to pay a little extra to reflect those improvements, which in turn helps drive the positive flywheel of additional investment to further improve and grow our service,” the Shareholder letter read.
Netflix Revenues Jump 12% to $8.8 Billion
Besides the growth in subscriber numbers, the streaming company also posted a 12% year-over-year growth in revenue to $8.83 billion. During the 2023 financial year, Netflix posted $6.9 billion in free cash flow.
The company’s approach to profitability is also working. In Q4 2023, Netflix’s annual earnings hit $938 million, $2.11 per share. The net income posted during the period reached $55.3 million, equivalent to 12 cents per share.
Netflix has also shared its growth forecast for Q1 2024. It estimates that revenues will surpass $9.2 billion, a 13% growth compared to the first quarter of 2023. It also expects net income to soar to $1.9 billion, equivalent to $4.49 per share.
To achieve these numbers, the streaming giant needs to contend with competitors like Disney and Amazon, who are also fighting for a significant share of the streaming business.
Big Plans Ahead
Netflix also outlined its plans for 2024. One main highlight is a $10 billion deal that will see the wrestling show “WWE Raw” move to the streaming platform. Netflix plans to air the wrestling show exclusively in Canada, Latin America, the UK, and the US before adding other countries and regions.
BREAKING: Netflix is getting into live sports.
The streaming platform will air WWE’s Raw starting next year as part of a 10-year, $5 billion deal.
This is massive news for the future of sports rights. pic.twitter.com/ocEm9CiFp0
— Joe Pompliano (@JoePompliano) January 23, 2024
The weekly show will start airing on Netflix in 2025, and it will supplement the sports content finding its way to the platform. On March 3, 2024, Netflix will air a live sports event for tennis fans dubbed “The Netflix Slam.” The event will feature Rafael Nadal and Carlos Alcaraz.
Netflix is also not interested in any mergers and acquisitions in 2024. According to the company, new M&As will not change the competitive environment, adding that consolidation has already happened over the past decade. Nevertheless, Netflix expects competition to remain high.