Shares of Netflix soared by 7% after the closing bell on Tuesday following the company’s announcement of a substantial increase in subscribers during the fourth quarter. The streaming giant reported adding 13.1 million subscribers, bringing its total paid subscriber count to 260.8 million.
This surge in subscribers comes after Netflix had previously announced the addition of 8.76 million paid memberships in the third quarter, bringing its total to 247 million. Wall Street had anticipated continued growth, with forecasts predicting an additional 8 to 9 million paid memberships in the fourth quarter, reaching around 256 million subscribers.
Netflix made headlines with another strategic move as it announced its plans to stream WWE Raw starting next year. This move marks the streaming platform’s significant foray into live entertainment and is expected to further bolster its subscriber base.
While Netflix continues to focus on subscriber growth, it is also actively working on boosting its profitability. The company has implemented various strategies such as price hikes, password crackdowns, and the introduction of ad-supported tiers to increase its revenue streams.
The recent Variety Entertainment Summit at CES provided a glimpse into Netflix’s advertising-based plan, with the company’s president of advertising, Amy Reinhard, revealing that Netflix now boasts over 23 million global monthly active users, up from 15 million reported in November.
Netflix’s efforts to enhance its profitability have also been evident in its pricing strategies. Last quarter, the company announced another round of price hikes, with the exception of its $6.99 per month ad-supported tier and standard $15.49 per month plan. The basic plan saw a $2 increase to $11.99 per month, while the premium plan increased to $22.99 per month, marking a $3 hike.
These price adjustments are part of Netflix’s broader strategy to address higher production costs resulting from the Covid-19 pandemic and the Hollywood labor strikes in mid-2023.
As Netflix continues to evolve its business model, investors are eagerly anticipating further details on how these strategic moves will impact the company’s financial performance. With its subscriber base growing and new content partnerships on the horizon, Netflix appears poised for continued success in the competitive streaming landscape.
(Source: Forbes | Bloomberg | CNBC)
