Netflix Adds 13 Million Subs in Q4

Netflix reported a surge in its subscriber base in the fourth quarter, adding 13.1 million members to reach 260.3 million, a 12.8 percent year-on-year gain.

The streaming giant has seen considerably slower growth for the last several quarters following its Covid-19-driven surge. In Q3 2023 it added almost 9 million subs, up from the 5.9 million in Q2. In the first quarter of this year it added just 1.75 million net new customers.

Revenues for the period were also up, rising 12.5 percent year-on-year to hit $8.8 billion, with net income of $938 million. Over the course of the year, the company has focused on increasing value by broadening its offer into games, live and sports-related content, scaling its advertising tier and bolstering its connections with members.

“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,” the company said. “If we can continue to improve Netflix faster than the competition, we’ll have an increasingly valuable business—for consumers, creators and shareholders.”

Addressing the competitive environment, Netflix’s letter to shareholders notes that it’s “logical to expect further consolidation, particularly among companies with large and declining linear networks. We’re not interested in acquiring linear assets. Nor do we believe that further M&A among traditional entertainment companies will materially change the competitive environment given all the consolidation that has already happened over the last decade. But we expect our industry to remain highly competitive, given the franchise strength and programming expertise within traditional entertainment companies; ongoing heavy investment from large tech players like YouTube, Amazon and Apple; and broader competition for people’s time, including gaming and social media (TikTok, Instagram etc.). It’s why continuing to improve our entertainment offering is so important, and as many of our competitors cut back on their content spend, we continue to invest in our slate. In FY24, we expect a high single-digit percentage year-over-year increase in content amortization.”

The letter continued, “With over 260 million households and growing, no entertainment company has ever tried to program at this scale, and for so many tastes and cultures. That requires us to invest in a wide variety of movies and shows and to continually improve our slate, title by title. The goal is simple: for people to know that when they start a show or movie, they will love it. Because when people regularly press play and stay, they’re happier and place a higher value on our service—which means they stick around longer (retention) and recommend Netflix to their friends (acquisition).”

North American revenues at Netflix were $3.9 billion, with 80.1 million subs, up by 2.8 million. In EMEA, where the streamer added 5.05 million subs to reach 88.8 million, revenues were $2.8 billion. LatAm revenues increased to $1.1 billion, with a subs base of 46 million, a gain of 2.35 million. In AsiaPac, the platform added 2.9 million customers to reach 45.3 million, with revenues of $963 million.