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Netflix blew previous Wall Avenue’s expectations by including a sturdy 13mn subscribers within the fourth quarter, defying considerations that its crackdown on password sharing may start to lose steam.
The subscriber determine set a document for the fourth quarter and matched progress ranges final seen through the pandemic. Viewers flocked to look at scripted sequence equivalent to The Crown and unscripted fare equivalent to Beckham, serving to to lift the corporate’s whole variety of international subscribers by 13 per cent to 260mn.
Netflix stated its working earnings soared to $1.5bn within the quarter from $550mn a yr earlier, thanks to larger income and “decrease than deliberate” spending. The streaming pioneer ended the yr with 12.5 per cent income progress — a robust rebound from 2022 when it skilled subscriber losses that shook investor confidence within the streaming business mannequin.
Netflix struck an optimistic observe concerning the well being of its enterprise, marking a pointy distinction with legacy Hollywood studios affected by steep declines in linear tv and heavy streaming losses. “As Netflix has proven, [streaming] will also be a really wholesome enterprise,” it stated in a letter to shareholders.
Executives stated they anticipated consolidation among the many conventional leisure firms, however added that they didn’t intend to be patrons. “Our historic bias is to construct and never purchase,” stated Spencer Neumann, chief monetary officer, in a video name with analysts. “We’re not serious about among the large linear belongings that will or might not be obtainable.”
The corporate forecast “wholesome double-digit” income progress for the complete yr. “We enter 2024 with good momentum,” it stated within the shareholder letter.
Netflix stated it deliberate to construct out its promoting enterprise this yr and would work to enhance the standard of its movie and sequence choices. Greg Peters, co-chief government, additionally stated he anticipated to see continued advantages from the initiative to discourage password sharing. “We’re going to proceed to enhance that engine and that can enhance our progress for years forward, not simply in 2024,” he stated.
The corporate largely halted value rises because it rolled out the password sharing crackdown final yr, however Peters stated Netflix would resume will increase this yr.
Earlier on Tuesday Netflix stated it had struck a 10-year, $5bn deal with World Wrestling Leisure, a transfer that can push it additional into the reside streaming market. The deal elevated hypothesis that Netflix was laying the groundwork to enter the marketplace for streaming reside sports activities as Amazon, Apple and others have carried out.
Ted Sarandos, co-chief government, shot these strategies down. WWE’s scripted “sports activities leisure” content material fitted with Netflix’s enterprise, he stated, however the firm was not serious about bidding for standard sports activities rights.
“I’d not take a look at [the WWE deal] as a sign to another change in our sports activities technique,” he stated.