By Netflix experienced a surge in new sign-ups at the end of last year as customers responded to the company’s efforts to curb password-sharing by creating individual accounts. The streaming service added over 13.1 million subscriptions in the last quarter of 2023, marking its highest quarterly growth since 2020 and continuing a trend of expansion from the previous year.
During a recent quarterly update call with analysts, co-chief executive Greg Peters expressed confidence in Netflix’s growth trajectory and announced plans for price increases. He noted that after implementing measures to address password sharing, the company is now able to resume its standard pricing strategy.
Interestingly, a significant portion of the new members opted for Netflix’s most affordable plan, even with the inclusion of advertisements. In the 12 countries where Netflix offers ad-supported plans, including major markets like the UK and US, this plan accounted for 40% of new sign-ups.
This uptick in subscriptions comes as a surprise considering Netflix’s longstanding stance against advertising, citing concerns about user experience and business complexity. However, following a dip in subscribers and profits in the first half of 2022, the company explored new avenues for revenue generation and audience expansion, including the introduction of ads and increased focus on live events like the recent WWE Raw deal.
Netflix’s competitors, such as Amazon, are also adapting their strategies to include more live content and advertising options. Despite the initial skepticism, analysts like Paolo Pescatore believe Netflix’s approach is paying off, reaffirming its position as the leading streaming service.
While Netflix expects advertising to have a limited impact on growth in the near term, Wall Street remains optimistic about the potential for additional revenue streams. The company’s recent announcement of over 23 million ad-supported accounts further underscores the success of this initiative.
In addition to its subscriber growth, Netflix received recognition in the entertainment industry with 18 Oscar nominations, including a nomination for “Best Picture” for the film Maestro. This positive momentum has also translated into financial gains, with the company reporting a revenue of over $33.7 billion in 2023, marking a 6% increase from the previous year, along with a significant rise in profits.
Overall, Netflix’s recent performance highlights its ability to adapt to changing market dynamics and continue its growth trajectory amidst evolving consumer preferences and competition in the streaming landscape.
