Breaking the records: Netflix’s subscriber list has hit a new high!

Netflix is currently making a lot of noise on Wall Street. The fourth quarter has been great for everybody’s favourite OTT platform. The company recently announced its financial results, and the numbers seem to be rather appealing.  

Are you curious to know more? Here’s everything you need to know about Netfix’s new record and financials.

What is the news about Netflix?

The last three months of 2023 have witnessed a significant spike in Netflix’s subscriber count. Breaking its previous records and its own estimates, the company gathered 13.12 million paid subscribers between October and December 2023, taking the total number of subscribers to 260.28 million.

Besides the number of subscribers, the platform also saw a substantial rise in revenue as compared to previous quarters. The fourth quarter of 2023 saw a revenue of $8.83 billion, 12.5% more than the last quarter of 2022. The company reached an overall revenue of $33.72 billion for the year ending December 2023. 

Netflix has noticed an increase in its paid subscribers worldwide. Of the 13.12 million subscribers, the EMEA (Europe, Middle East and Africa) region contributed the highest at 5.05 million, followed by 2.9 million from Asia Pacific. The United States of America and Canada added 2.81 million, while another 2.35 million came from Latin America.

Also read: From print to digital: The story of India’s media and entertainment sector

Netflix attributes the growth in subscribers to two main reasons:

• The ad-supported plans: The earlier subscription plan of Netflix provided advertisement-free shows and movies to the audience. As a strategy to reduce subscription costs, Netflix introduced ad-supported plans, which include advertisements in between. It is a win-win strategy as the company makes up for the cost by charging brands for advertisements, while subscribers compromise their ad-free experience to save some cost.

• Removing the password sharing facility: Netflix, earlier, provided the facility for subscribers to share their passwords with others. This way, multiple users could watch shows and movies using one account. The removal of this facility has increased the demand since audiences must have their own accounts. However, members of the same household, using different devices, are allowed to share one Netflix account.

Netflix’s subscription price in India now ranges from ₹149 to ₹649 per month, depending on the resolution, sound quality, number of devices and users, and downloading facilities.

Netflix’s journey so far

Founded by Marc Randolph and Reed Hastings, Netflix is a well-known OTT Platform worldwide. The two founders began their DVD rental business in 1997. In 2007, the same was converted into an online video streaming platform with about 1,000 movies. From its initial idea of the ‘Netflix box’ that would allow users to download movies overnight to a video streaming platform, Netflix has come a long way. 

• It was in 2011 that the company expanded its business to producing original content besides streaming movies and shows. 
• In 2017, the company ventured into international film productions. 
• In 2021, the firm expanded its portfolio to include gaming through Squid Games.

Today, Netflix is widely used by audiences across the world, from every country except Russia, China, North Korea, Crimea and Syria.

Netflix is listed on the US Stock Exchange – NASDAQ. Post the release of 2023’s Q4 results, the share price increased 8.3% from $492.19. As of 24 January 2024, Netflix is trading at $544.87.

Why has Netflix lost subscribers in the past? 

Despite being one of the top OTT platforms, Netflix saw a downfall in the first half of 2022, with about 1 million users cancelling their subscriptions. Some of the associated reasons were:

• The Ukraine war, because of which Netflix stopped its services in Russia
• Increase in subscription prices
• Increase in competition among video streaming companies
• The cancelling of sharing accounts first saw a negative impact, with existing subscribers leaving

However, Netflix has overcome its challenges and bounced back in its subscriber count, beating its own expectations.

Also read: Sony-Zee merger terminated

The OTT industry

The over-the-top industry is currently on the rise. People are shifting from regular cable services to OTT platforms. The OTT market is expected to reach $419.90 billion by 2028, with over 4.4 billion users. Considering the number of hours spent on OTT platforms, India ranks number one with 194 billion hours.

Peer review

The OTT market is growing by the day, both in terms of users and service providers. Let’s take a look at some notable numbers of popular OTT players in the global market.

Some popular OTT platforms in India are:

Netflix India, Amazon Prime Video India, Zee5, Disney + Hotstar, Voot, Jio Cinema, Alt Balaji, Sun Network, Eros Now, etc.

The future of OTT platforms

According to a report by Mordor Intelligence, the OTT market is expected to reach $1.99 trillion by 2029. While North America is expected to be the largest market, Asia Pacific is anticipated to be the fastest-growing one. 

The future of OTT will mainly revolve around the quality of content over the quantity streamed. Different monetising models can also benefit these platforms, as users are always on the lookout for new and reasonable options. Using advanced streaming technology is also critical in staying ahead of competitors. Besides these, producing global content over regional content is essential for expansion and attracting new audiences.

Also read: Karan Johar: The maestro of Indian cinema

Bottomline

We live in the digital era. Gone are those days of waiting for cables to telecast your favourite shows. Today, all it needs is some money and a decent internet connection to watch your favourite shows anywhere at any time.

The last few years have witnessed significant growth, especially in the OTT space. So, as finance enthusiasts, it may be a smart move to go beyond subscriptions and check if these stocks fit well in your investment portfolio.