Netflix added 9.3 million subscribers in the first quarter of 2024, it announced Thursday, beating analysts' expectations and cementing its status as the entertainment industry's dominant streaming company.
It also generated net income of $2.3 billion and its revenue was $9.3 billion, 15% higher than the same period last year. Netflix today has nearly 270 million subscribers worldwide.
The streaming giant said its quarter was buoyed by audience interest in series such as “Griselda,” “3 Body Problem” and “Avatar: The Last Airbender.”
Its advertising business, which is now a year old and offers subscribers a lower-priced option, grew 65% compared to last quarter. The company said that in markets where the ad tier was available, 40% of new signups chose that option. A crackdown on password sharing among families also supported the company's quarterly numbers.
“As we noted in our latest letter, our two priorities in advertising are growing our member base and building our capabilities for advertisers,” the company said in a letter to shareholders. “We made progress on both fronts in the first quarter.”
The company now expects full-year revenue growth of 13-15%.
“No entertainment company has ever programmed on this scale and with this ambition before,” Netflix said in its letter. “To satisfy such a large audience, we need lots of great stories that appeal to many different tastes – and by great we mean movies, series and games that our members love (i.e. we take an audience-centric approach to quality).”
Dan Lin began his role as Netflix's head of film on April 1, and his message to employees has been to improve the overall quality of the service's films and produce a wider variety of films at different budget levels . The goal is to better appeal to the diverse interests of Netflix's large subscriber base.
Films reported by Netflix as driving engagement during the first quarter included “Damsel” starring Millie Bobby Brown, “Lift” starring Kevin Hart and “The Greatest Night in Pop,” a documentary about the making of the charity song “We Are the World”. in 1985.
Rich Greenfield, media analyst at LightShed Partners, said Netflix is beating analysts' forecasts, solidifying its dominance over the competition.
“All signs point to Netflix having reached escape velocity, with subscribers growing much faster than investors expected,” Greenfield said.
Greg Peters, Netflix's co-chief executive, said in a shareholder interview posted on YouTube that the company is using a variety of tools, such as advertising and the “extra member” feature, where subscribers can purchase an other subscription for someone outside of their account. family – to increase average revenue per user, a metric that Wall Street watches closely.
“We've also evolved our pricing and plans with multiple tiers, different pricing in different countries,” Peters said. “This change is really motivated by a desire to focus on what we see are the key metrics that we believe are most important to the business.”
Ted Sarandos, Netflix's other co-CEO, said on the call that Netflix has no plans to increase the amount of money it plans to spend to create and acquire content for the streaming service, despite the availability of new shows.
“The doors have definitely opened a little more on licensing,” Sarandos said. “But again, we're very focused on the ones we think will drive the business.”
Netflix shares fell slightly in aftermarket trading.