Netflix Adds 13M Subscribers In Blockbuster Earnings Report

Alex Weprin
·3-min read

With the Hollywood strikes in the rearview mirror, Netflix reported a blockbuster quarter, with subscribers surging, and its profit margin staying strong.

The streaming giant reported 13 million new subscribers, with revenue of $8.8 billion and operating income of $1.5 billion. The company had reported 9 million new subscribers last quarter, as its crackdown on sharing passwords continued.

More from The Hollywood Reporter

In fact, Q4 was the second-best quarter ever for subscriber sign-ups, only falling short of Q1 2020, when the COVID-19 pandemic led to a surge in sign-ups as people stayed home.

That being said, the company wrote in its quarterly letter that “we believe we’ve successfully addressed account sharing, ensuring that when people enjoy Netflix they pay for the service too,” suggesting that the surge in subscribers created by the crackdown is slowing.

“We have gotten to the point where paid sharing is just something that we do,” co-CEO Greg Peters said on the company’s earnings call.

Going forward, the company highlighted three opportunities for 2024, including “improving the core (series and film), while broadening our offering (games, live and sports-adjacent programming),” which suggests a closer look at where it is spending money on content; scaling and growing its advertising business; and a plan to “deepen our connection with fans through our marketing, consumer products and innovative new live experiences.”

The earnings report also comes as much of the rest of the industry is throwing in the towel when it comes to trying to compete with Netflix on scale. Disney said late last year that it would license some of its general entertainment content to Netflix, joining NBCUniversal, Warner Bros. Discovery and Paramount in the practice.

“I am thrilled that studios are more open to licensing again, and thrilled to tell them that we are open for business,” co-CEO Ted Sarandos said on the call.

Netflix also made it clear in its letter that it does not expect to be a buyer of the companies licensing this content.

“As our competitors adjust to these changes [in streaming], it’s logical to expect further consolidation, particularly among companies with large and declining linear networks,” the letter says. “We’re not interested in acquiring linear assets. Nor do we believe that further M&A among traditional entertainment companies will materially change the competitive environment given all the consolidation that has already happened over the last decade (Viacom/CBS, AT&T/Time Warner, Disney/Fox, Time Warner/Discovery, etc.).”

It also comes in what has already been a significant week for the company. On Monday, it was disclosed that Netflix’s film chief Scott Stuber will be exiting the company after seven years.

And on Tuesday morning the company announced a blockbuster 10-year, $5 billion deal for WWE Raw, as well as WWE content internationally. That deal puts Netflix firmly in the live event and sports space, an area it has been exploring but has not dove into with alacrity.

While the WWE deal “feeds the desire to expand live event programming,” Sarandos said, he adds that “I would not look at this as a signal to any change to our sports strategy,” suggesting further sports deals are unlikely for now.

Rather, “this is almost the inverse of Formula 1, a very big and passionate U.S. fanbase, and big room to grow outside of the U.S.”

The company noted some upcoming live events, including the exhibition tennis match The Netflix Slam and the SAG Awards, and added that they “will enable us to understand what audiences value most, and how to eventize these moments, as we did with Chris Rock’s stand-up special Selective Outrage in March 2023.”

That being said, Sarandos said on the earnings call that the live event push will exist within the company’s $17 billion annual content budget.

Best of The Hollywood Reporter

  • Up next
  • Up next
  • Up next
  • Up next

Latest stories