Netflix Packs on More Than 13 Million Subscribers in Q4, Well Above Expectations
Netflix extended its lead as the world’s biggest premium video-streaming platform — pulling in a better-than-expected 13.1 million subscribers for the fourth quarter of 2023, a Q4 record. The company’s Q4 revenue came in slightly above Wall Street forecasts, while net income fell short.
As of the end of 2023, Netflix counted 260.28 million total members globally. On average, analysts expected the company to report about 8.8 million net new subs for the year-end quarter.
More from Variety
Netflix Bulks up Southeast Asia Originals, Chinese-Language Production Slate
Apple Services Revenue Hits New Record, Jumping 11% to $23.1 Billion in Year-End 2023 Quarter
Netflix shares were up more than 8% in after-hours trading on the subscriber beat.
Revenue in Q4 grew 12% year over year, to $8.83 billion, higher than Netflix’s previous forecast due to favorable foreign exchange rates and “stronger than anticipated membership growth,” the company said. Net income was $938 million, or $2.11 per share. Wall Street expected earnings per share of $2.22 on revenue of $8.71 billion, according to financial data provider LSEG (formerly known as Refinitiv).
The Q4 earnings report comes after Netflix announced a blockbuster 10-year deal for WWE’s “Monday Night Raw” earlier in the day — the streamer’s biggest bet to date in live sports. Under the deal, Netflix will pay about $500 million annually to TKO Group for media rights in multiple territories starting in 2025 to “Raw” (currently on USA Network in the U.S.) along with other programming.
“WWE is great sports entertainment with a huge, established and passionate fanbase, and we believe this long term partnership will be a big value add for our members,” Netflix said in its Q4 shareholder letter.
On the earnings interview, Netflix co-CEO Ted Sarandos said the deal with WWE “fits within” the company’s anticipated $17 billion spending on content in 2024. He added, “I would not look at this as a signal to any other change, or a change to our sports strategy” — labeling WWE as “sports entertainment” rather than sports in the conventional sense.
Netflix’s ad-tier membership grew almost 70% compared with the prior quarter, according to the company, but it again did not break out numbers. (It recently said it has more than 23 million active monthly users on ad plans worldwide.) To spur sign-ups to the ad-supported plan, Netflix said it will fully discontinue the entry-level Basic plan without ads in certain markets starting in Q2 in the U.K. and Canada.
Also Tuesday, Netflix garnered 18 Academy Awards nominations — the biggest tally among all studios — including seven for Bradley Cooper’s “Maestro” Leonard Bernstein biopic. That came after news that Scott Stuber, Netflix’s head of film, is exiting to launch a new media venture.
On the TV front, Netflix released 99 original seasons in Q4, down from a record high of 145 in the year-earlier period. “Looking ahead, despite last year’s strikes pushing back the launch of some titles, we have a big, bold slate for 2024,” Netflix said in the shareholder letter.
Among the TV series it called out coming this year: “Squid Game” Season 2, along with “The Diplomat” Season 2, “Bridgerton” Season 3 and “Empress” Season 2, as well as unscripted series like “Love Is Blind” Season 6, “F1: Drive to Survive” S6 and “Full Swing” S2. New shows Netflix called out include “3 Body Problem,” based on the best-selling novel and from the showrunners of “Game of Thrones” ; “Griselda,” starring Sofia Vegara, which premieres this week; “The Gentlemen” from Guy Ritchie; “Eric,” starring Benedict Cumberbach; and “Avatar: The Last Airbender.”
On the film side, in addition the “Rebel Moon” sequel from Zack Snyder, the slate includes “Back in Action” with Cameron Diaz and Jamie Foxx, “Carry On” from Steven Spielberg’s Amblin Entertainment starring Jason Bateman and Taron Edgerton, “Spellbound” from producer John Lasseter, Eddie Murphy reprising his role in “Beverly Hills Cop: Axel F” and “Six Triple Eight” starring Kerry Washington and directed by Tyler Perry.
Netflix’s games strategy, in which game titles are bundled for no extra cost with the core streaming plans, remains in its “early days” but the company noted that user engagement on its games tripled in 2023. “Despite games still being small, and certainly not yet material relative to our film and series business, we’re pleased with this progress,” the company said in the shareholder letter. Netflix cited the Q4 debut of the Grand Theft Auto trilogy from Rockstar Games as its “most successful launch to date in terms of installs and engagement, with some consumers clearly signing up simply to play these games.”
Regarding rivals, Netflix said “it’s logical to expect further consolidation, particularly among companies with large and declining linear networks.” However, the company reiterated, “We’re not interested in acquiring linear assets. Nor do we believe that further M&A among traditional entertainment companies will materially change the competitive environment given all the consolidation that has already happened over the last decade (Viacom/CBS, AT&T/Time Warner, Disney/Fox, Time Warner/Discovery, etc.).”
That said, Netflix expects streaming to “remain highly competitive,” given “the franchise strength and programming expertise within traditional entertainment companies” as well as “ongoing heavy investment” from big tech players like YouTube, Amazon and Apple and “broader competition for people’s time,” including gaming and social media like TikTok and Instagram.
“If we continue to execute well and drive continuous improvement — with a better slate, easier discovery and more fandom — while establishing ourselves in new areas like advertising and games, we believe we have a lot more room to grow,” Netflix told shareholders, calling out a more than $600 billion opportunity revenue market across pay TV, film, games and branded advertising, of which Netflix currently accounts for roughly 5% of the total.
Pictured above: Netflix’s dystopian thriller movie “Leave the World Behind” starring Mahershala Ali, Myha’la Herrold, Julia Roberts and Ethan Hawke
VIP+ Analysis: Netflix Is Stream King. What More Do Investors Want?
Best of Variety
Sign up for Variety’s Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
