Streaming market leader - Netflix gains eight million new customers
Netflix continues to grow unchecked and is poised to significantly diminish the viewership of traditional television. In the last quarter, the video streaming market leader gained approximately eight million household subscriptions. There were significant increases in revenue and profit as well - and Netflix now has more money to invest in new films and series.
Globally, Netflix now has around 277.7 million household subscriptions. Since last year, the service has taken a stance against password sharing, which has also contributed to the growth in user numbers.
Many former freeloaders signed up for their own subscriptions instead of returning Netflix's service. In the last quarter, for instance, a new season of the series "Bridgerton" and films like "Atlas" and "Hitman" kept customers engaged.
Many users opt for the most affordable way to watch Netflix: an ad-supported subscription. In countries where this is offered, 45% of new subscribers choose this option.
Entertainment for 600 million viewers
Netflix faces the unique challenge of creating a program for more than 600 million people who collectively spend several hours a day using the service, as Co-CEO Ted Sarandos emphasized.
Each year, the streaming giant invests roughly 17 billion dollars for series, films, and live programming. This amount will increase with revenue growth, Sarandos stated. Netflix has recently experimented significantly with live events and, for the first time, ventured into the expensive business of sports broadcasting with two NFL games for Christmas.
Despite its dominance in the streaming market, Netflix only accounts for under ten percent of total TV viewing time, Netflix acknowledged. In the US, for example, the service lags slightly behind Google's video platform YouTube. To fuel further growth, Netflix is focusing on the remaining 80 percent of TV viewing time, Sarandos said.
Revenue and profit increase
The revenue grew by around 17% in the last quarter compared to the previous year, reaching 9.6 billion dollars (8.77 billion Euro), according to Netflix's US stock exchange announcement. The profit increased from 1.49 to nearly 2.15 billion dollars.
Netflix slightly missed the revenue forecast for the current quarter from analysts. However, the streaming leader already warned that the growth in subscribers would be lower than in the previous quarter due to the crackdown on password sharing.
For the entire year, Netflix is now slightly more optimistic about revenue growth, projecting a 14-15% increase instead of the previously anticipated 13-15%. The stock price remained relatively unchanged in US trading after initially falling into the red.
No interest in bundling with rivals
Netflix is profitable while competitors like Disney and Paramount struggle to turn their streaming offerings into the black. The market leader is aware of its strength and has made it clear that it will not entertain bundling deals with other services, which rival companies may pursue.
Netflix sees an advantage in producing films and series in various countries. These shows have garnered large viewership numbers in their home markets and have even become international hits. A prime example of this is the South Korean series "Squid Game," which is set to have a second season this year.
- The significant growth of Netflix in the USA contributed to a decrease in traditional television viewership, with the company gaining around eight million new household subscriptions in the last quarter.
- Ted Sarandos, Co-CEO of Netflix, highlighted the challenge of satisfying the entertainment needs of over 600 million users, who collectively spend several hours a day on the platform.
- In response to the crackdown on password sharing, Netflix experienced a surge in new subscriptions, with many former freeloaders opting for their own subscriptions.
- Netflix's investment in new films and series continues to grow, with the streaming giant spending roughly 17 billion dollars each year for series, films, and live programming.
