Netflix Adds 13.1M Subs, Beats Growth Expectations

Netflix
(Image credit: Netflix)

Netflix handily beat growth expectations in the fourth quarter, adding 13.1 million subs globally, while throwing cold water on speculation that it might want to acquire Paramount Global. In a letter to shareholders outlining its Q4 2023 financial results, the company told investors that they are “not interested in acquiring linear assets” and expressed doubts that more consolidation will "materially change the competitive landscape."

Sub growth in Q4 2023 was better than the streamer had seen since the pandemic, with global subs topping 260 million for the first time. Even in the more mature U.S. and Canadian market, Netflix added 2,807,000 million subs in Q4 2023 and 5,832 for all of 2023 for a total of 80,128,000 paying subs. 

Meanwhile revenue jumped by 12.5% year-over-year, its operating margin grew by 16.5% YoY and net income increased from $55 million in Q4 2022 to $938 million in Q4 2023, indicating that the company’s push to expand ad revenue, crackdown on password sharing and push subs into ad-supported tiers was continuing to pay financial dividends. 

The company also reported that it is expecting double digit revenue growth in 2024 and that it is forecasting that net income in Q1, 2024 should more than double to $1,976 million. 

The earnings pushed Netflix stock, which had already seen significant gains in the past year, up in afterhours trading. 

While executives remained bullish on streaming, the company’s letter to shareholders stressed that the industry would remain highly competitive and dismissed speculation that they might acquire linear assets.  

“As our competitors adjust to these changes, it’s logical to expect further consolidation, particularly among companies with large and declining linear networks,” the letter said. “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/TimeWarner, Disney/Fox, TimeWarner/Discovery, etc.). But we expect our industry to remain highly competitive given: the franchise strength and programming expertise within traditional entertainment companies; ongoing heavy investment from large tech players like YouTube, Amazon and Apple; and broader competition for people’s time, including gaming and social media (TikTok,Instagram etc.).”

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George Winslow

George Winslow is the senior content producer for TV Tech. He has written about the television, media and technology industries for nearly 30 years for such publications as Broadcasting & Cable, Multichannel News and TV Tech. Over the years, he has edited a number of magazines, including Multichannel News International and World Screen, and moderated panels at such major industry events as NAB and MIP TV. He has published two books and dozens of encyclopedia articles on such subjects as the media, New York City history and economics.

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