Netflix Ends 2023 with Record Subscriber Growth and $10 Billion WWE Deal

SAN FRANCISCO - In a remarkable comeback year, Netflix has reported its third-consecutive quarter of accelerating subscriber growth, surpassing analyst projections and closing out 2023 with a record-breaking number of new subscribers. This growth comes despite the video-streaming service implementing price hikes and cracking down on viewers freeloading on its platform.

The fourth-quarter results, announced on Tuesday, revealed that Netflix added 13.1 million worldwide subscribers during the October-December period, exceeding the 8.8 million additional subscribers gained in the previous quarter. These gains brought Netflix's total global subscribers to over 260 million, marking an annual increase of nearly 30 million subscribers.

Netflix's success can be attributed to its strategic moves, including a low-priced streaming plan that introduced commercials for the first time. This plan has been well-received by customers, accounting for approximately 40% of new subscribers in markets where it's available. Additionally, the company implemented measures to block viewers who were accessing the service for free using the passwords of paying customers.

To further justify the higher subscription prices and attract more advertisers, Netflix announced a $10 billion deal to bring the popular wrestling program, WWE's "Raw," to its service. This move follows Netflix's focus on acquiring high-profile content, such as the Emmy-award winning black comedy “Beef” and the Oscar-nominated film, "Maestro."

The revenue for the fourth quarter reached $8.83 billion, a 13% increase from the previous year, exceeding analysts' forecasts. However, earnings per share fell short of expectations due to a $239 million charge associated with foreign debt.

Netflix's success has set it apart from other media giants, such as Walt Disney Co. and Warner Bros. Discovery, whose video-streaming services have struggled to generate profits. In 2023, Netflix's stock price rose by 65%, reflecting Wall Street's confidence in its technology platform, programming, and global distribution.

Looking ahead, Netflix aims to sustain last year's momentum by exploring new revenue streams, including live programming. The acquisition of “Raw” indicates the company's interest in expanding its offerings in this area. Furthermore, Netflix plans to continue its push into video games, as it has observed an increasing number of subscribers spending more time engaged in gaming on its platform.

While the company expects several years before ad sales generate significant revenue, it remains confident in its ability to convert viewers using borrowed passwords into paying customers. Netflix's co-CEO, Greg Peters, stated that the crackdown on password sharing will improve growth for years to come.

Analysts anticipate further growth for Netflix, as it continues to innovate and establish itself in new areas like advertising and gaming. With its strong performance in 2023, Netflix has proven that it has room to grow and maintain its position as a leader in the streaming and cable-TV landscape.