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In the latest edition of the weekly newsletter, Roula Khalaf, Editor of the Financial Times, handpicks her top stories that captivated readers across the globe.
- Netflix made headlines by gaining a remarkable 19 million subscribers in the last quarter. The allure of binge-watching the latest episodes of Squid Game coupled with live sports extravaganzas such as the widely anticipated boxing face-off between Mike Tyson and Jake Paul drew viewers in hordes.
- The surge in subscriptions propelled Netflix to a staggering 301 million global subscribers by the end of 2024, marking a 15% increase from the previous year and surpassing Wall Street’s estimate of 293 million. The announcement saw Netflix’s shares spike by more than 13% in after-hours trading sessions.
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As part of its strategic move, Netflix announced a price hike in select regions including the US, Canada, Portugal, and Argentina. The most popular US plan will see a $2.50 increase, reaching $17.99 per month, while the basic ad-supported tier in the US will rise by $1 to $7.99 a month.
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Paolo Pescatore, an analyst at PP Foresight, acknowledged Netflix’s move, stating, “(Netflix) is now flexing its muscles by adjusting prices given its far stronger and diversified programming slate compared to rivals.”
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Netflix’s foray into live sporting events witnessed significant success with the Tyson-Paul boxing match garnering 65 million views globally and two NFL games on Christmas Day attracting 24 million viewers each. Additionally, the launch of Squid Game Season 2 set a new record with 68 million views in its debut week.
As Netflix embarks on 2025 with a strong footing, boasting record subscriber additions and accelerated growth, it foresees stiff competition but remains undistracted by the declining traditional TV networks that its Hollywood counterparts are grappling with.
In the fourth quarter, Netflix reported revenue of $10.2 billion and increased its revenue forecast for the year by $500 million, signaling a potential 14% growth from 2024. Earnings per share more than doubled, reaching $4.27 from $2.11 the previous year, while operating income soared by 52% to over $2 billion.
- Netflix has announced it will no longer be reporting quarterly subscriber figures, signaling a shift in transparency. However, it plans to release these numbers at key milestones in the future.
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The crackdown on password sharing in May 2023 proved beneficial for Netflix, propelling shares up by over 80% in 2024. Although the initial surge may dwindle, Netflix is pinning its hopes on live events to attract new subscribers. The recent weekly streams of WWE Raw, as part of a 10-year deal with the wrestling entertainment group, are a testament to this strategy.
With a sharp focus on enhancing its advertising offerings, Netflix aims to substantially grow its advertising revenue in 2025. The implementation of live events and improved advertising channels are seen as pivotal to the company’s future success.
In conclusion, Netflix’s strategic maneuvers underscore its unwavering commitment to innovation, growth, and offering an unparalleled viewing experience to its global audience. As the streaming landscape evolves, Netflix continues to set the bar high with its diverse content and forward-thinking strategies that keep viewers hooked and investors intrigued.
