Netflix Wins More Subscribers, Stock Climbs

Netflix experienced significant growth in the fourth quarter, surpassing expectations with over 13 million new subscribers, largely driven by international markets. 

The company's total subscriber count soared to 260.3 million, resulting in a 7% surge in stock prices post-announcement. Key strategies contributing to this growth included a crackdown on password sharing and the introduction of a lower-priced, ad-supported subscription option in the U.S. 

The ad tier alone attracted over 23 million memberships. Netflix's revenue growth was notable, reaching 12% in 2023, up from 6% the previous year, with a fourth-quarter revenue of $8.8 billion. 

However, its earnings-per-share fell short of expectations at $2.11. Amidst industry turbulence, including strikes in the entertainment sector, Netflix diversified into gaming, live entertainment, and sports, highlighted by a $5 billion deal for "WWE Raw" rights. 

The company’s venture into live sports broadcasting began with "The Netflix Cup," and it also plans to exclusively stream the Screen Actors Guild Awards. 

Netflix expanded its gaming offerings with popular titles from the Grand Theft Auto series, seeing significant download and engagement numbers. Despite these expansions, Netflix has no plans to enter the traditional cable TV space, focusing instead on streaming and live events.

Investors are pleased with the company’s turnaround. A year ago, Netflix was experiencing flat subscriber growth and weak profit projections. After introducing its ad tier and cracking down on password sharing, the company has stormed back into positive territory according to several measures.