Netflix subscribers surge despite price hikes

Netflix added 13 million subscribers in the final three months of 2023, the company said on Tuesday.

Despite price hikes, Netflix finished 2023 with more than 260 million subscribers worldwide, with a profit of $938 million in the final quarter versus just $55 million in the same period a year earlier.

Netflix shares were up more than 8 % to $532.75 in after-market trades that followed the release of the earnings figures.

"Choice and control are the price of entry in modern entertainment, and that is streaming," Netflix said in the earnings letter. "It's what consumers want, and we believe it's the best way for our industry to stay relevant and growing."

Late last year, the streaming platform increased the price of its basic plan in the United States to $11.99 monthly and its premium plan to $22.99, with similar price hikes in Britain and France. In 2022, the platform expanded its crackdown on users sharing passwords with people beyond their immediate family.

“We had almost no price increases until late in the year in '23. And even then, it was just

a partial quarter impact. As we look to '24, as we noted in the letter for 2024, we expect healthy double digit FX-neutral revenue growth, including growth in FX-neutral ARM,” remarked Spencer Adam Neumann, Chief Financial Officer, Netflix, during an earnings call.

Netflix launched an ad-subsidized offering around the same time as the crackdown. The ad-supported tier is priced at $7 monthly.

The company said on Tuesday that it would retire the lowest cost ad-free plan, starting with Canada and the UK in the second quarter of this year. The company said earlier this month it has 23 million subscribers using the ad-supported tier, which accounts for 40 % of new sign-ups.

“Our primary focus is on revenue growth. We had very strong revenue growth in EMEA this past quarter. 13% FX neutral growth in Q4. We had a really strong slate across EMEA from The Crown finale in the U.K., to -- in France, we had Blood Coast and Lupon and Class Act. We had Berlin, Elite and Nowhere in Spain and Poland, 1670 and much more,” remarked Neumann.

Gregory K. Peters, Co-CEO, President and Director, Netflix, in an earnings call, expressed that the streaming giant talked about over $25 billion in CTV ad spend alone.

“And when we think about how we compete for some of that ad spend, I really think we need to play to our strengths. We've got an incredibly engaged audience, the most engaged audience who are watching the most culture-defining films, series and live events. That is an important place for brands to be, and it's something that differentiates us from our competitors. So that's the space that we're going to play in,” he added.

Peters also added that the company is continuing to expand its lineup of more than 80 mobile games that subscribers can play, having recently added the blockbuster "Grand Theft Auto."

The earnings news came the same day that Netflix sealed a long-term broadcast deal with WWE, as it pushes further into sporting events. The agreement will also see WWE shows and live events streamed across the globe as their rights become available.

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