Netflix witnessed a surge in new sign-ups at the end of last year, with over 13.1 million subscriptions added in the three months ending December.
This marked the highest quarterly growth since 2020. The company attributed this growth in part to its crackdown on password-sharing, which prompted individuals to create their accounts.
For the year 2023, Netflix reported revenue exceeding $33.7 billion, a growth of over 6% compared to 2022, with profits reaching $5.4 billion, up from $4.49 billion the previous year.
Co-chief executive Greg Peters expressed confidence in Netflix’s growth trajectory and announced plans to resume standard price increases. The company had temporarily halted such increases during the rollout of paid sharing. Peters emphasized a return to “business as usual” during a call with analysts discussing the latest quarterly update.
Interestingly, a significant number of new members opted for Netflix’s cheapest plan, which includes advertisements. In the 12 countries where Netflix offers this ad-supported plan, including major markets like the UK and US, it accounted for 40% of new sign-ups.
This shift represents a departure from Netflix’s historical stance against incorporating ads, citing concerns about compromising the viewer experience and introducing privacy risks.
Facing unexpected subscriber decline and profit reduction in the first half of 2022, Netflix adopted various strategies to attract new viewers and increase revenue.
In addition to the ad-supported plan and password crackdown, the company is exploring live events, exemplified by a recently announced 10-year, $5 billion deal to bring WWE Raw to its platform.
Netflix’s rivals, such as Amazon, are also adapting to the evolving streaming landscape by investing in live sports events and exploring ad-supported models. Paolo Pescatore, an analyst at PP Foresight, praised Netflix’s strategy, stating that the latest results reaffirm Netflix’s position as the leading streaming platform.
The company’s strong content lineup, including popular series like the Beckham documentary and Adam Sandler’s Leo, contributed to its robust performance. Netflix received 18 Oscar nominations, including a nomination for “Best Picture” for Maestro starring Bradley Cooper and Carey Mulligan.
