Netflix announced that it recorded about 19 million new subscriptions during the last quarter of 2024, bringing its total subscribers to 301.6 million, strengthening its position as a leading platform in the field of streaming broadcasting.
The California-based group has achieved strong growth in the number of its subscribers since 2023, thanks to tightening its policy regarding sharing passwords between users, and enhancing direct performances in the field of sports in particular.
During the end-of-year holidays, the platform showed live two NFL matches and a boxing match between YouTuber and boxer-trainee Jake Paul and boxing legend Mike Tyson.
The second season of the series “Squid Game” was released on December 26.
But the number of new subscriptions registered to watch these matches or the South Korean series “represents only a small percentage of total subscriptions during this quarter,” according to what co-CEO Greg Peters explained during an analyst conference.
He stressed that “the increase in the number of subscriptions that we witnessed in this quarter is due to the service as a whole.”
Netflix achieved quarterly revenues of $10.2 billion, with an increase of 16%, of which $1.9 billion was net profit. These two results are slightly higher than market expectations.
Its shares rose more than 14% during electronic trading after the New York Stock Exchange closed.
High subscription prices
Despite the significant growth it achieved in the number of new subscribers, Netflix indicated in the spring that it would stop discussing these numbers every three months starting this year, with the aim of focusing on audience “engagement” metrics (i.e. the time they spend watching content).
For analysts, this decision means that the American group will focus on increasing its revenues and profit margins.
Netflix has begun increasing its prices in the United States, so the “basic” subscription costs $18 instead of $15.50. As for the cheapest subscription, which includes ads and was launched at the end of 2022, it rose to $8 instead of $7.
“We find this price at which we are launching the service acceptable when you consider all the entertainment it provides,” Peters said.
Netflix hopes to begin generating significant revenues from this subscription this year.
“In the fourth quarter, subscription with ads represented more than 55% of subscriptions in countries where this format is available,” Peters said, adding, “We doubled our advertising revenues year-over-year in 2024, and we look forward to doubling them again this year.”
To convince advertisers and the public, the company is betting specifically on live broadcasts, especially sports matches.
In January 2024, Netflix signed a ten-year agreement with the American Professional Wrestling Association (WWE) for $5 billion, allowing it to broadcast its championship matches for the next ten years. Last month, it announced an exclusive contract with the Women’s World Cup.
“Advertising and live broadcasting”
Mike Proulx, director of research at Forrester, said, “Despite the technical problems, the boxing match between Jake Paul and Mike Tyson was the most watched sporting event via streaming,” explaining that “more than 24 million people watched the NFL matches during the Christmas period.” “.
He continued, “It is no secret that direct shows with very high follow-up rates motivate major brands to spend,” adding, “By 2025, there will be additional options in terms of advertising formats, partnerships, and technical options to target Netflix users.”
Ross Bennis of eMarketer said that advertising and live broadcasting, “which were rejected by the company until recently, have become its priorities.”
The analyst indicated that he would not be surprised if “Netflix obtains more sports rights in the future,” after it indicated that it would not seek to buy the rights to traditional sports seasons.
Aside from live broadcast, this year the platform can count on the latest seasons of “Stranger Things” and “Squid Game,” in addition to the second season of “Wednesday.”
In response to a question about the fires that are still sweeping through neighborhoods in Los Angeles, the group’s co-general director, Ted Sarandos, responded that the disaster “should not cause significant delays or financial impacts,” but it “significantly disrupts the lives of many.”
