Netflix added 9.3 million subscribers in the first quarter of 2024, it announced on Thursday, outperforming analysts’ expectations and solidifying its status as the entertainment industry’s dominant streaming company.
It also generated $2.3 billion in net income and its revenue was $9.3 billion, 15 percent higher compared with the same time last year. Netflix now has almost 270 million subscribers around the world.
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 ad-tier business, which is now a year old and offers subscribers a lower-priced option, grew 65 percent from last quarter. The company said that in the markets where the ad tier was available, 40 percent of new sign-ups chose that option. Cracking down on password sharing among households also buoyed the company’s quarterly numbers.
“As we noted in our last letter, our two priorities in ads are to scale our member base and to build out our capabilities for advertisers,” the company said in a letter to shareholders. “We made progress on both fronts in Q1.”
The company is now expecting revenue growth for the entire year to reach 13 to 15 percent.
“No entertainment company has ever programmed at this scale and with this ambition before,” Netflix said in its letter. “To satisfy such a large audience, we need many great stories that appeal to lots of different tastes — and by great, we mean movies, series and games our members love (i.e. we take an audience-centric approach to quality).”
Dan Lin began his role as Netflix’s chief of film on April 1 and his message to employees has been to improve the overall quality of the service’s films and to produce a wider variety of movies at different budget levels. The aim is to better appeal to the varied interests of Netflix’s sprawling subscriber base.
Films highlighted by Netflix for driving engagement during the first quarter included “Damsel” starring Millie Bobby Brown, “Lift” with Kevin Hart and “The Greatest Night in Pop,” a documentary about the making of the benefit song “We Are the World” in 1985.
Rich Greenfield, a media analyst at LightShed Partners, said that Netflix was outpacing analysts’ predictions, cementing its dominance over the competition.
“All signs point to Netflix having reached escape velocity, with subscribers scaling far faster than investors expected,” Mr. Greenfield said.
Greg Peters, Netflix’s co-chief executive, said in an interview for shareholders posted on YouTube that the company was using a variety of tools, such as advertising and its “extra member” feature — in which subscribers can buy another subscription for someone outside their household — to increase its average revenue per user, a metric that Wall Street watches closely.
“We’ve also evolved our pricing and plans with multiple tiers, different price points across different countries,” Mr. Peters said. “This change is really motivated by wanting to focus on what we see are the key metrics that we think matter most to the business.”
Ted Sarandos, Netflix’s other co-chief executive, said during the call that Netflix didn’t have any plans to increase the amount of money it intended to spend on making and acquiring content for the streaming service, despite the availability of new shows.
“The floodgates have opened a little more on licensing for sure,” Mr. Sarandos said. “But again, we’re very focused on the ones that we think will drive the business.”
Netflix shares were down slightly in aftermarket trading.
Source Agencies
