With its combination of live sporting events, popular returning shows, and unique moments, like Beyonce’s football halftime performance, Netflix was able to draw in a record number of members over the Christmas quarter, solidifying its domination of the streaming video industry on Tuesday.
With 18.9 million new members in its fourth quarter, the firm has roughly 302 million users worldwide, much more than its Hollywood streaming competitors.
As it invests more in programming, Netflix aims to take advantage of its booming popularity by hiking rates in the US, Canada, Portugal, and Argentina. The premium plan will cost $24.99, w% more than the current price, while the company’s ad-supported subscription will cost $7.99 per month in the U.S., up from $6.99.
As a consequence of the positive response from investors, Netflix’s shares increased by almost 13% during prolonged trading, increasing its market worth by nearly $50 billion. Netflix’s stock has risen almost 77% in the past year, surpassing the S&P 500’s 24% increase.
According to Paolo Pescatore of PP Foresight, Netflix has reaffirmed its dominance in the streaming business and is destroying it. With a significantly more robust and varied content slate than its competitors, it is now showing off its power by modifying rates.
With fans gorged on the second season of its dystopian survival drama “Squid Game,” the company claimed its fourth-quarter programming slate exceeded its projections and is poised to become one of its most-watched original series.
Tens of millions are attracted by Netflix’s increasing investment in live-streamed events. The November heavyweight boxing bout between Mike Tyson and Jake Paul had 65 million streams. With an average of 30 million viewers worldwide, the two National Football League games on Christmas Day—one of which included Beyonce’s halftime performance—ranked among the league’s most-streamed events ever.
According to Mike Proulx, research director at Forrester, content attracts people to streaming services. “Netflix’s focus on high-quality content is the cause for an overall good year and fourth quarter, which has resulted in the most significant increase in members ever.
Netflix claimed to have recovered from the effects of COVID-19 and the 2023 Hollywood writers’ and actors’ strikes, and it is releasing new seasons of its most well-liked programs, such as the otherworldly “Stranger Things” and the Addams Family serial “Wednesday.”
Additionally, it will show additional live events, such as monthly WWE “Monday Night Raw” wrestling bouts. In 2027 and 2031, it acquired the FIFA Women’s World Cup rights, demonstrating its approach to providing special-events content instead of regular-season sports packages.
Advertisers find such live events appealing because they attract real-time viewers.
Netflix Co-CEO Greg Peters stated, “We doubled our ads revenue year over year last year, and we exceeded our ads revenue target in the fourth quarter.” This year, we anticipate doubling it once again.
According to the firm, 55% of new users in the countries where it is accessible join up for the ad-supported version of the service.
Tim Nollen, an analyst at Macquarie Equity Research, said that as more users join the company’s advertising-supported tier and as Netflix’s advertising technology advances, ad income will rise to $2 billion this year. In an analyst letter released before Netflix’s earnings announcement, he stated that live events will continue to drive sign-ups.
As the business prioritizes other performance indicators like revenue and profit, which analysts blame for decreasing subscriber growth, this quarter will also be the final time Netflix discloses subscriber increases.
According to an average of 34 analysts’ predictions, the business generated per-share earnings of $4.27, above Wall Street’s forecast of $4.20 per share. For the first time in the company’s history, annual operating profits topped $10 billion.
In contrast to Wall Street’s projections of $10.1 billion for the quarter, LSEG reports that revenue increased 16% to $10.2 billion over the same period last year. According to a person knowledgeable of the situation, sign-ups occurred throughout the quarter. Therefore, the quarter’s surge in subscribers did not translate into a corresponding increase in income.
With the revision of its guidance, the business increased its 2025 revenue projection by half a billion dollars, from $43.5 billion to $44.5 billion. The company stated that improving business fundamentals is reflected in the new outlook.
Additionally, Netflix’s board authorized an additional $15 billion to acquire shares, increasing the total amount authorized for buybacks to $17.1 billion.
