Netflix impressed the market on Tuesday with nearly 19 million new subscriptions gained during the fourth quarter of 2024, bringing its total to 301.6 million in all, cementing its position as a pioneer and leader in the streaming industry.
The Californian group has recorded strong growth in subscribers since 2023 thanks to the tightening of its policy on sharing passwords between users and the strengthening of its live programming, particularly in sport.
For the end-of-year holidays, the platform broadcast live two matches from the professional American football league NFL and a boxing match between YouTuber and apprentice boxer Jake Paul and boxing legend Mike Tyson.
She also released the highly anticipated second season of Squid Games on December 26.
But the number of new subscriptions taken out to see these matches or the South Korean phenomenon series “represents only a small minority of total member acquisition during the quarter”said Greg Peters, co-chief executive officer of the company, during a conference for analysts.
“It’s the entire service that’s driving the increase we’ve seen this quarter”he insisted.
Netflix achieved $10.2 billion in quarterly revenue, up 16%, of which it posted $1.9 billion in net profit, both results slightly above market expectations.
Its title gained more than 14% during electronic trading after the close of the New York Stock Exchange.
Price increase
Despite its impressive gains in new subscribers, Netflix indicated in the spring that it would no longer disclose this indicator every three months, starting this year, in order to focus on measurements « d’engagement » audience (time spent watching content).
For analysts, this means that the American group will focus on increasing its revenues and margins.
He started by increasing his prices in the United States. The formula « Standard » now costs 18 dollars instead of 15.50 and the cheaper plan with advertising, launched at the end of 2022, increases to 8 dollars per month instead of 7.
“This starting price seems really affordable to us, when you think about all the fun it represents”said Greg Peters.
-Netflix hopes to start generating significant revenue from this subscription this year.
“In the fourth quarter, the formula with ads represented more than 55% of registrations in countries where this formula exists”welcomed the leader. “We doubled our advertising revenue year over year in 2024, and we plan to double it again this year. »
To convince advertisers and the public, the company is betting in particular on live broadcasts, especially sports.
In January 2024, it signed a ten-year agreement with the American professional wrestling league WWE, for $5 billion, and last month it announced an exclusive contract with the FIFA Women’s World Cup.
“Reverse”
“Despite the technical issues, the Jake Paul vs. Mike Tyson fight was the most-watched sporting event streamed. And NFL Christmas games broadcast by Netflix were watched by more than 24 million viewers »underlined Mike Proulx, research director at Forrester, ahead of the results.
“It’s no secret that live programming with massive audiences incentivizes big brands to spend. In 2025, there will be more choices in terms of ad formats, partnerships and technical options for targeting Netflix users.he added.
Advertising and direct, “which were until recently disapproved by the company, are now among its priorities”commented Ross Benes of Emarketer.
The analyst would therefore not be “not surprised” you are Netflix “would backtrack in the near future and acquire more sporting rights”after indicating that it would not seek to purchase the rights to traditional sports seasons.
Apart from live, the platform will be able to count this year on the final seasons of Stranger Things and Squid Game, as well as the second season of Wednesday.
Furthermore, when asked about the fires which continue to ravage certain neighborhoods of Los Angeles, Ted Sarandos, co-general director of the group, replied that the disaster “should not cause significant delays or financial impact”but that she “dramatically disrupts many lives”.
Related News :