Netflix Profits Surge As 9.3 Million Subscribers Sign Up In Latest Quarter

(CTN News) – A massive increase in paying subscribers has boosted profits at Netflix, the world’s largest streaming service.

In the last quarter, the entertainment giant added 9.3 million subscribers – more than Wall Street analysts expected – leaving it with a record 269.6 million subscribers globally.

The company stated that it is off to an excellent start in 2024. Although the shares of the company dropped 2% during out-of-hours trading on Thursday, they had rallied by almost a third since the beginning of the year.

During the three months ended 31 March, Netflix generated revenue of $9.4 billion, an increase of 15%. The company’s net income increased 79% to $2.3 billion during the same period, exceeding analysts’ expectations.

The streaming revolution has been pioneered by Netflix, a company based in Los Gatos, California. Many of Hollywood’s established giants, including Disney and Warner Bros, are still scrambling to catch up – and turn a profit on their own rival digital services.

During the early stages of the pandemic, when most of the world was stuck at home, there was a boom in subscribers. Due to a lifting of restrictions in 2022, subscribers had slowed down as viewers ventured beyond their sofas. Since Netflix introduced a cheaper tier of its service with advertisements and cracked down on password sharing two years ago, its shares have surged.

In addition to producing hit series such as Fool Me Once and The Gentlemen, Netflix is also investing in live events, including coverage of World Wrestling Entertainment and video games in order to expand its service.

Earlier this week, the company informed investors that it will cease reporting the number of members it has as of next year.

Netflix has been attempting to steer Wall Street’s attention away from its subscriber growth numbers in recent months, arguing that other financial metrics such as sales are more important than subscriber growth.

Having forecasted a 15% increase in sales this year, the company said it will need to “improve the variety and quality” of movies, shows and games on its platform in order to achieve “healthy” long-term growth; make it easier for users to locate new series; and transform its ad-funded tier into a “more meaningful contributor” to its business in the long run.

Earlier this week, Moffett Nathanson senior analyst Michael Nathanson wrote to clients that Netflix had already emerged as the clear winner of the streaming wars. Announcing an upgrade to his annual profit forecast for the group, he stated that the company’s crackdown on password sharing had reaccelerated growth across the United States and Canada.

Despite cautioning against pie-in-the-sky predictions that the hockey stick will continue indefinitely, Nathanson stated that “fewer and fewer” households in the region are currently subscribed to Netflix.

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