CNN
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Netflix introduced a serious enhance in sign-ups within the fourth quarter on Tuesday. The corporate added greater than 13 million subscribers for the quarter, in comparison with Wall Avenue’s expectation of 8.7 million.
Whereas Netflix added 1.2 million paid subscribers within the fourth quarter within the US, a lot of the strongest subscriber development got here internationally from Europe and Asia.
Total, Netflix now has a report variety of subscribers at 260.3 million.
And traders appear to be cheering: Netflix’s inventory jumped greater than 7% in after-hours buying and selling Tuesday.
Password sharing and Netflix’s foray into advertisements
Previously 12 months, the corporate applied a number of initiatives geared toward including subscribers, together with a password-sharing crackdown that pushed password “debtors” into creating their very own subscriptions and introducing an advertising-supported subscription tier for $6.99.
The plan is considerably cheaper than Netflix’s ad-free choices, at $6.99 per thirty days within the US. In October, Netflix mentioned it raised the price of its premium ad-free plan to $22.99 whereas its one-stream fundamental plan rose to $11.99.
Earlier this month, Amy Reinhard, Netflix’s president of promoting, mentioned Netflix’s advert tier hit greater than 23 million month-to-month memberships.
On Tuesday, Netflix sounded a optimistic word on its rising promoting enterprise.
On the corporate’s fourth-quarter earnings name, Netflix co-CEO Greg Peters mentioned he had excessive hopes for Netflix’s means to grab advert {dollars} from conventional TV opponents.
“We all know advert {dollars} observe engagement. We’ve acquired probably the most engaged viewers so we imagine we’re effectively positioned to seize a few of that advert spend that shifts from linear to streaming,” he mentioned.
In Tuesday letter to shareholders, Netflix declared its password-sharing crackdown successful, as effectively.
“We imagine we’ve efficiently addressed account sharing, guaranteeing that when individuals take pleasure in Netflix they pay for the service too,” it mentioned.
Netflix completed 2023 with 12% income development, up from 6% development in 2022. The corporate posted income of $8.8 billion for the fourth quarter however got here wanting Wall Avenue’s expectations for earnings-per-share at $2.11, in accordance with Factset estimates.
Gaming, sports activities and leisure
Final 12 months was turbulent for the leisure business as each writers and actors went on strike for a number of months. Netflix, nevertheless, has just lately made investments to diversify its enterprise exterior of scripted programming.
Looking forward to 2024, Netflix mentioned it sees “massive alternatives” to additional enhance its core TV and movie content material, whereas additionally broadening its providing into gaming, stay leisure and sports activities programming.
Earlier on Tuesday, Netflix introduced that it had acquired the unique rights to air “WWE Uncooked” stay, at present seen on Comcast’s USA cable community. The ten-year deal is valued at greater than $5 billion, in accordance with an organization submitting.
On Netflix’s earnings name Tuesday, co-CEO Ted Sarandos mentioned the WWE deal falls “proper within the candy spot of our sports activities enterprise, which is the drama of sport.”
“Consider this as 52 weeks of stay programming yearly. It feeds our want to develop our stay occasion programming,” he mentioned. “This also needs to add some gas to our new and rising advert enterprise.”
In November, Netflix aired its first-ever stay sports activities occasion, known as “The Netflix Cup,” a crossover competitors between System 1 drivers {and professional} golfers.
The corporate may even experiment with stay awards present content material, completely screening the Display screen Actors Guild Awards in late-February.
However in a letter to shareholders on Tuesday, Netflix shot down any hypothesis that it plans to enterprise into the standard cable TV house, which has skilled declines as extra TV-watchers reduce the twine and swap to streaming.
“We’re not occupied with buying linear property,” the corporate mentioned in its letter.
The fourth quarter additionally noticed a giant growth in Netflix’s video game offering. In December, Netflix launched three mobile-friendly video games from Grand Theft Auto, probably the greatest promoting online game franchises ever.
“We’re stoked by the efficiency of GTA,” Peters mentioned Tuesday. “The most important obtain and engagement numbers that we’ve seen thus far. We have been within the prime cell recreation downloads for a number of weeks, which reveals it was not solely massive for us, however massive numbers for cell gaming generally.”