Netflix, Inc. (NASDAQ: NFLX) has unveiled its financial results for the fourth quarter and the full fiscal year, ending December 31, 2023, and the results are noteworthy. The OTT streaming giant registered a 12.5% YoY and 3.4% QoQ growth in its global operating revenue, reaching an all-time high of $8.83 billion in Q4 2023. Netflix’s net profit surged to $937.84 million in the fourth quarter of 2023, a substantial increase from a mere $55.28 million a year ago period. However, on a quarterly basis, it is a massive 44.1% decline from $1.68 billion in net profit generated in Q3 2023.
Taking a broader perspective, Netflix’s global revenue for fiscal 2023 hit a new high of $33.72 billion, with a modest 6.7% YoY growth. Net profit also soared 20.4% YoY to $5.41 billion during the year.
Main Highlights: Netflix Streaming Subscribers
- Netflix’s global streaming paid memberships reached an impressive 260.28 million by the end of December 2023, with a 12.8% YoY increase. The streaming giant added 29.53 million new paid subscribers worldwide over the course of the year.
- The net additions in Netflix’s paying subscribers worldwide were 1.75 million in Q1, 5.89 million in Q2, 8.76 million in Q3 and 13.12 million in Q4 2023.
- Over 34% of Netflix’s total paying users came from the Europe, Middle East and Africa (EMEA) region, totalling 88.8 million as of December 2023.
- Approximately 30.8% of Netflix’s paying streaming users were from the United States and Canada regions, totalling 80.13 million as of December 2023. This was followed by 46 million (17.7% of the total) from Latin America and 45.34 million (17.4% of the total) from the Asia-Pacific (APAC) region.
Netflix’s Revenue from Users
In 2023, Netflix generated an average revenue of $43.45 per paying streaming member globally. However, there was a marginal 0.87% YoY decline in revenue when compared to the $43.83 average revenue per membership generated by the OTT platform in 2022.
The dip in Netflix’s average revenue per paying subscriber is primarily attributed to a decrease in revenue per user from the Asia-Pacific (APAC) region, despite its status as the most populous region in the world. The streaming giant generated only $7.64 from each APAC user in 2023, a significant 10.1% YoY decline.
Breaking down the financial metrics, approximately 37.5% of Netflix’s total revenue per paying user in 2023 came from the United States and Canada, amounting to $16.28. The EMEA region accounted for 25% of the total, bringing in $10.87 in revenue from each paying subscriber during the year. Latin America followed closely, accounting for 19.9% of the total revenue per streaming user on Netflix, totalling $8.66 in 2023.
Strategic Moves
Netflix’s quest for streaming supremacy involves not only top-notch content creation but also strategic marketing endeavours, particularly intensifying during the holiday season each year. One of the key factors behind its subscriber growth is its strategic marketing spending. In Q4 2023, Netflix’s marketing expenses soared a whopping 64.1% QoQ and 10.2% YoY, to $916.62 million.
It is important to note that every year, Netflix strategically allocates more marketing resources in the fourth quarter than in each of the preceding three quarters, reinforcing its dedication to capturing audience attention during the festive season.
In addition to strategic decisions, Netflix’s bold move to crackdown on password-sharing, despite facing criticism, has played a crucial role in expanding its subscriber base. This initiative has acted as a catalyst, encouraging more people to get their own subscriptions. The streaming giant has even introduced fees for additional users beyond the primary account holder in certain regions., resulting in a direct boost to revenue from existing subscribers.
In the world of OTT streaming, Netflix’s prowess is undeniable. As the company continues to navigate the ever-expanding landscape of content creation, user engagement, and strategic marketing, its financial results underscore its resilience and adaptability in the competitive global OTT streaming industry.
