Netflix Has Never Been More Successful (Or More Expensive)
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Its fair to say that Netflix had pretty high expectations for itself in the fourth and final financial quarter of 2024.Bolstered by the December 26 premiere of Squid Game season 2, the livestream double whammy of two NFL Christmas Day games and the Jake Paul/Mike Tyson fight, and the impending arrival of WWE Raw in January 2025, the streamer was expected to add around 9 million new paid subscribers during the observed October-December timeframe. Still, even that ambitious estimate fell well short of the reality of Netflixs success to close out the year.In reporting its 2024 Q4 earnings results on January 21, Netflix revealed that it overshot that 9 million new subscriber number by juuuuust a tad. All in all, the streamer brought in a record 18.91 million fresh subscribers, pushing its total number of global members to over 300 million for the first time in the companys nearly 20-year history. If my hasty, back-of-the-envelope calculation is correct, that means roughly four percent of all human beings on planet Earth currently have a Netflix account. (Funnily enough, four percent seems to be a pretty consistent metric when it comes to Netflix as a 2024 study found that four percent of U.S. adults have never heard of the worlds most popular streamer. Humankind truly contains multitudes).While many earnings reports are perfunctory, legally-mandated affairs to keep investors apprised of market-moving numbers, some conference calls can take on the cadence of a celebration. That is very much the case with Netflixs latest update, which points to an organization that has all but won the streaming war. There has, quite simply, never been a better time to be Netflix.Even beyond the eye-catching 300 million subscriber benchmark, Netflixs Q4 numbers are quite impressive under the hood. Netflix reported that, accounting for extra member accounts, its global audience could be as high as 700 million. Its net income for the period was $1.87 billion, up nearly a full billion dollars from the same period last year. One prominent analyst described the streamers latest earnings as near flawless, while the companys stocks surged 100%.Markets are perpetually in search of the financial unicorn that can unlock the infinite growth cheat code, and Netflix suddenly seems as good a candidate as any. As its technology and entertainment competitors flounder under the weight of poor management (Meta), questionable product gambits (also Meta), and close ties to an unpopular incoming administration promising tariffs (again: Meta), Netflix feels as though its built for the long haul more than ever. The whole world is a Blockbuster just waiting to get bankrupted. Of course, whats best for Wall Street isnt always whats best for the consumer. And tucked into Netflixs good-time earnings bonanza was news of across-the-board price hikes. The streamer announced the following changes: The standard plan (with ads) moves from $6.99 to $7.99. The standard plan (without ads) moves from $15.49 to $17.99 per month, representing the first price increase at this level in three years. The premium plan, with four simultaneous streams, moves from $22.99 to $24.99 per month. The cost of adding an additional member to any plan moves from $7.99 to $8.99.The price increase of the ad-supported plan is sure to be particularly disappointing for some, as it represents the first time Netflix has increased that model and suggests that a further blending of ad and subscription costs could be in the companys long-term plans. To explain the changes, Netflix wrote to investors that: As we continue to invest in programming and deliver more value for our members, we will occasionally ask our members to pay a little more so that we can re-invest to further improve Netflix.Its not reasonable to expect a streamers prices to remain the same in perpetuity, especially as it adds additional content and, in theory, value. Thats not even to mention the global uptick in the inflation rate following the COVID-19 pandemic response. But Netflixs latest price increases seem more closely associated with its ascendance as the streaming war winner than they do with the financial reality on the ground. One Redditor notes that the premium plans price increased by 108% over the span of 10 years while the global inflation rate over the same time frame was 33%.Going forward, Netflix will face increased pressure on two fronts: from investors who want to see improvements upon record earnings and from subscribers who want their increased subscription price justified. Ironically, the likely resolution to both of these capitalistic quandaries lies in the 2025 arrival of the third and final season of the most successful anti-capitalist fable ever streamed. Join our mailing listGet the best of Den of Geek delivered right to your inbox!
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