After vigorously cracking down on shared accounts, American streaming giant NFLX added 13.1 million subscribers in the fourth quarter of last year, bringing the total number of paid subscribers to 260.8 million.
On January 23, local time, Netflix released its fourth quarter financial report for the year ended December 30, 2023 after the US stock market closed. During the reporting period, the company achieved revenue of $8.833 billion, a year-on-year increase of 12.5%, higher than the previously expected $8.692 billion; The net profit was 938 million US dollars, with an adjusted earnings per share of 2.11 US dollars. The company expects to achieve a revenue of 9.24 billion US dollars in the first quarter of 2024, a year-on-year increase of 13.2%; Earnings per share was $4.49, higher than market expectations of $4.10.
Netflix's stock price closed at $492.19 on the 23rd, with a total market value of $215.4 billion. Netflix has risen 65% in the past 2023. In post market trading, Netflix's stock price surged, rising by over 8.5% at one point.
Netflix Q4 2023 data. Source: Netflix Financial Report
After Netflix reported an increase of 8.76 million new paid members in the third quarter of last year, its membership growth momentum did not weaken. Netflix added 13.1 million new subscribers in the fourth quarter, significantly exceeding the market's previous expectation of a maximum growth of 9 million. From a regional perspective, Netflix added 1.2 million paid subscription users in the United States this quarter, but the strongest subscription growth mainly came from the European and Asian markets.
Jessica Reif Ehrlich, an analyst at Bank of America, said that Netflix "clearly has won the streaming war.". According to data from research firm Antenna Research, Netflix has the lowest monthly churn rate among major streaming services, with only 2% in December last year.
Netflix stated in its financial report that as the company focuses on improving profitability, it has raised its expected operating profit margin for the fiscal year 2024 to 24%, higher than the previous forecast range of 22% to 23%, based on factors such as a weaker US dollar and a better than expected fourth quarter performance.
Faced with a continuously intensifying competitive environment, Netflix, which plans to invest in more projects, also emphasized in its financial report that the company is not prepared to acquire traditional entertainment companies or media like many streaming competitors: "Considering the significant integration that has occurred in the past decade, we do not believe that further mergers and acquisitions between traditional entertainment companies will bring substantial changes to the competitive environment."
Naifei emphasized that the company attaches great importance to content investment and will strengthen cooperation with entertainment companies and television media in this area. It plans to invest up to $17 billion in content this year. Earlier that day, as the latest attempt in the field of sports live streaming, Netflix announced a 10-year agreement worth over $5 billion, which will grant exclusive broadcasting rights to the popular program "Raw" by World Wrestling Entertainment (WWE) in multiple countries including the United States, Canada, Latin America, and the United Kingdom, effective from January 2025.
Last year, Netflix launched a membership program with advertisements for $6.99 per month. In the previous quarter's financial report, Netflix stated that its current top priority is to develop advertising membership, which increased by nearly 70% month on month in the third quarter. Earlier this month, Netflix reported that its global active advertising membership has increased from 15 million in October last year to 23 million.
This financial report shows that although Netflix does not believe that advertising revenue will become the company's main source of revenue in 2024, it is also striving to expand the scale of this business. During the post earnings conference call, Netflix Co CEO Greg Peters said, "We are focusing on the additional work that can be done in the advertising field to make our advertising membership program more attractive. We have added streaming content, higher resolution and download capabilities, as well as attracting partners. We will do more."
In addition, Netflix is also considering enhancing its connection with advertisers, including meeting their needs in the way the brand needs by strengthening its sales team and advertising operations.