In the last quarter of 2023, Netflix witnessed an unprecedented surge, adding a staggering 13.1 million subscribers – its highest Q4 influx ever. Notably, 40% of these new subscribers opted for the advertising subscription option where available.
The growth in advertising subscriptions saw a remarkable 70% increase compared to the preceding quarter, bringing the total active users to 23 million. This marks an impressive gain of 8 million subscribers in just a few months. While Netflix reveals plans to expand its advertising market presence, co-CEO Greg Peters emphasizes the current focus on existing markets, hinting at potential expansion in the future.
In a strategic move, Netflix announces the discontinuation of its Basic subscription in certain countries, starting from Q2 2024, with Canada and the United Kingdom being the initial phase-outs. This decision, disclosed in mid-2023, paves the way for the ad-supported variant, and the streaming giant intends to phase out the Basic subscription in more markets. Presently available in twelve countries, this change excludes the Benelux region.
Despite these alterations, Netflix’s financial performance remains robust, boasting a Q4 2023 turnover surpassing $8.3 billion – a growth of over 12% compared to the same quarter the previous year. Net income soared to $938 million, significantly surpassing the $55 million reported in Q4 2022. However, compared to earlier quarters in 2023, net income shows a marginal decline. Looking ahead, Netflix anticipates an additional $1 billion net income for Q1 2024.
In response to evolving challenges, Netflix implemented measures against account sharing at the onset of 2022. Additionally, the streaming giant ventured into the advertising realm at the end of that year, offering subscribers an option to experience content with intermittent advertisements.