'The Crown' and 'The Killer' help Netflix smash its fourth-quarter subscription record
The business said that it surpassed the projected profit of 8.97 million by adding 13.1 million consumers in the December quarter, its largest fourth-quarter customer growth ever. With this, there are now 260 million members worldwide.
The fourth-quarter membership expectations for Netflix were surpassed by Wall Street on Tuesday, thanks to a robust lineup of programming that includes the popular royal drama "The Crown" and David Fincher's original movie "The Killer."
The business said that it surpassed the projected profit of 8.97 million by adding 13.1 million consumers in the December quarter, its largest fourth-quarter customer growth ever. With this, there are now 260 million members worldwide.
After hours trading saw an 8.3% increase in Netflix shares. A 65% increase in the stock is anticipated in 2023.
"Streaming wars are clearly being won by Netflix," said Jessica Reiff Ehrlich, a media analyst at Bank of America.
The firm missed the average forecast of $2.22 per share by reporting profits of $2.11 per share. Netflix said that a $239 million non-cash loss associated with foreign exchange rates had an effect on profits per share.
Exceeding both the company's own guidance of $8.7 billion and projections, revenue for the quarter increased to $8.8 billion.
The industry leader in streaming announced that, as it continues to invest in its advertising business and recruit new members, it anticipates strong double-digit revenue growth for the whole year 2024. According to Netflix, income growth is not now primarily driven by advertising, but by 2025, it hopes to change.
The company credited the success of its intellectual property, which included non-English language programming like the third season of "Lupin" compared to France, new original series like "All the Light We Can't See," a reality show centered around its most popular TV series "Squid Game: The Challenge," as well as feature films like Zack Snyder's "Rebel Moon: A Child of Fire."
Strong demand for licensed games like "Young Sheldon" was also mentioned. Netflix has a "rich history," according to co-CEO Ted Sarandos, of launching some of the greatest shows on television, including "Breaking Bad," "The Walking Dead," "Schitt's Creek," as well as most recently, "Suits."
During Netflix's investor webcast, Sarandos said, "I'm thrilled that studios possess a greater open to licensing again, and I'm thrilled to let them understand which we're open for business."
According to Ehrlich of Bank of America, Netflix benefits from shifting market forces that are compelling media businesses to reconsider their approaches to holding onto films and TV shows only for their streaming platforms. He referred to it as a "win-win" situation because Netflix is able to lower its expenditures on riskier original content while also giving other media businesses much-needed cash from these license agreements.
According to Netflix, there are growth prospects if it keeps enhancing its lineup and breaks into new markets like gaming and advertising. Even though the gaming industry is still young, the firm reported a threefold increase in engagement.
Following the two strikes in Hollywood last year, Netflix intends to spend more on programming, according to Chief Financial Officer Spencer Newman. This year, streamers are expected to spend up to $17 billion, according to him, but "we want to do it in a smart, prudent, responsible way."
The business said that it will keep making investments and trying out live programming. A contract worth more than $5 billion was revealed earlier on Tuesday by Netflix and TKO Group Holdings to exclusively broadcast World Wrestling Entertainment's "Raw" and select other shows on the streaming service starting in January 2025.
"For decades, WWE has increased this multi-generational fan base since we believe we can serve and we can grow," Sarandos said. "We think that traditionally, WWE's reach outside of North America has been insufficient. And this is a worldwide issue. Thus, we can support them and they can assist us in expanding that fan base globally."
Jamie Lumley, an analyst at Third Bridge, said that the WWE contract is indicative of Netflix's ongoing efforts to broaden its content offerings.
"This is the company's deepest step yet into live programming as well as will bring a huge amount of original programming to the platform each year," Lumley said.
Additionally, Netflix promoted "Stranger Things: The First Shadow," their first stage performance based on the popular television series.
No comments:
Post a Comment