© Lemon squeezer
While it once tolerated account sharing, Netflix has finally decided to crack down on the practice, in order to boost its growth (to encourage people to subscribe instead of asking for passwords of their friends). Obviously, SVOD has come under some criticism. And some were afraid that the decision would have a counterproductive effect. But as Netflix's results for the last quarter of 2023 demonstrate, it was ultimately a good decision.
During the last three months of 2023, SVOD added 13.1 million new subscribers worldwide, which is above Wall Street forecasts. On the other hand, this is a record increase, for a fourth quarter, and a level of growth comparable to that observed during the pandemic, according to the Financial Times. Revenue was also up 12.5%.
During the conference call, Netflix co-CEO Ted Sarandos also indicated that The company is excited about its engagement trends, whether in the United States or the rest of the world. However, due to the end of free password sharing, engagement numbers have been impacted. “Think of it like fewer households using the same account. So as these people break off and get their own accounts and we gain them through our programming, it will become normalized and continue to grow”, he explained.
Advertising is also a hit
Netflix’s other great innovation is advertising. As a reminder, SVOD ended up changing its mind regarding online advertising and today offers a subscription which is partly financed by advertising.
Currently, this advertising-supported offer already has 23 million subscribers. And during the conference call, Netflix indicated that it saw a 70% increase in subscribers from one quarter to the next.
Netflix has already made many efforts to make this ad-supported offer attractive. And in the coming months, the company should continue to improve it. “[…] I think it’s fair to say that we still have a lot of room for growth in all the markets that we operate in”, explained Greg Peters, Netflix's other co-CEO, on the ad-supported Netflix subscription.
A big budget for content
When it comes to content, Netflix users shouldn't be disappointed. SVOD still plans to spend $17 billion per year on its content. And among the big announcements, there is a licensing contract to broadcast WWE's Raw program in 2025. The agreement, lasting 10 years, would be valued at $5 billion.
- In the last quarter of 2023, Netflix added over 13 million subscribers
- This is record growth for a last quarter and is comparable to that observed during the pandemic
- Netflix demonstrates that by putting an end to free password sharing, it made the right decision
- Netflix is also banking heavily on its new affordable and partially funded by advertising, which now has more than 23 million users
📍 To not miss any news from Presse-citron, follow us on Google News and WhatsApp.
14.4 M reviews