Netflix Finishes 2023 With a Q4 Subscriber Record
After a turbulent 2022, Netflix regained its footing in 2023, ending the calendar year with a Q4 record in terms of subscription growth. After adding 5.9 million paid subscriptions worldwide between March and June and a whopping 8.8 million from July to September, the final quarter of 2023 saw the company increase its subscriber base by 13.1 million to roughly 260 million. The biggest net increases were reported in the Asia-Pacific and EMEA regions.
Netflix's global rollout of the paid account sharing feature played an integral part in the latter region especially, according to comments by Chief Financial Officer Spencer Adam Neumann in the company's most recent earnings call. Neumann also pointed out the strong performances of local programming like The Crown in the United Kingdom and Lupin in France as growth drivers.
Although the crackdown on account sharing initially led to decreasing subscriber numbers in select markets, Netflix's gamble seems to have paid off in the long run. The newest subscriber increase, announced yesterday, was the biggest since the first quarters of the pandemic, when stay-at-home orders made subscriptions soar. Revenue in the past quarter was up 12.5 percent - slightly above the forecast - to $8.8 billion.
Just how much paid sharing contributed to the streaming service's revenue is unclear. What's clear, however, is that Netflix is planning to install its ad-based tier as the new base product sooner rather than later. According to the current letter to shareholders, 40 percent of all sign-ups choose the subscription model with ads. The Basic plan will allegedly be phased out for new users in the United Kingdom and Canada as early as Q2 2024, leaving subscribers with a choice of ad-supported streaming or the pricier Standard and Premium tiers.
With paid sharing rolled out and a positive end to this past year, the company is optimistic in its forecast for Q1 2024. Revenue is expected to be up 13 percent year-over-year, while subscriber numbers are expected to increase by around 1.8 million. Netflix's share price rose eight percent after the new earnings were posted.