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Netflix Surges with Record 19 Million New Subscribers in Holiday Quarter

Netflix has reported a remarkable addition of 18.9 million subscribers during its holiday quarter, surpassing expectations and delighting investors. The streaming giant credited this surge to the popularity of live sporting events and the return of the hit South Korean series "Squid Game." To support its expanding programming, Netflix announced price increases for various service plans in the U.S., Canada, Portugal, and Argentina. For instance, the basic ad-supported plan in the U.S. will see a US$1 monthly increase to US$7.99, marking a 14% rise, while the premium package will now cost US$24.99, up by 9%.


Netflix shows and movies, arranged in a grid format with a large Netflix logo at the center.
Credit: NETFLIX

Investors responded enthusiastically to the news, propelling Netflix's stock up by approximately 13% in after-hours trading, boosting the company's market value by nearly US$50 billion. Over the past year, Netflix's shares have surged by more than 77%, outperforming the S&P 500's 24% increase. The streaming service highlighted the success of its fourth-quarter programming lineup, with events like the Jake Paul vs. Mike Tyson boxing match and NFL games on Christmas Day drawing massive viewership.


One of the key drivers of Netflix's recent success has been the second season of "Squid Game," which is on track to become one of the platform's most-watched original series. The company also boasts the lowest cancellation rate among subscription streaming services, with a mere 1.8% churn rate in December. Analyst Paolo Pescatore of PP Foresight commended Netflix's dominant position in the streaming market, attributing its success to a robust and diverse content offering compared to competitors.


Netflix has navigated challenges such as the impact of COVID-19 and industry strikes, continuing to deliver fan-favorite shows like "Wednesday" and "Stranger Things." Looking ahead, the company plans to introduce more live events, including WWE's "Monday Night Raw" and new films like "Wake Up Dead Man: A Knives Out Mystery" starring Daniel Craig. Additionally, Netflix secured rights to broadcast the FIFA Women's World Cup in 2027 and 2031, aligning with its strategy to offer special-events programming.


The streaming service's advertising strategy has been bolstered by live events, with the ad-supported version accounting for 55% of new sign-ups in eligible countries. Analysts predict a significant increase in ad revenue, with Macquarie Equity Research estimating a rise to $2 billion this year. Netflix's decision to shift focus from reporting subscriber additions to emphasising revenue and profit signals a strategic shift in response to evolving market dynamics.


In its latest financial report, Netflix exceeded Wall Street's earnings per share forecast, reporting $4.27 per share against an estimated US$4.20. Annual operating income surpassed $10 billion for the first time in the company's history, reflecting robust financial performance. Looking forward, Netflix revised its 2025 revenue projection to US$43.5 billion to US$44.5 billion, indicating a positive outlook driven by improved business fundamentals. The company's board also approved an additional $15 billion for share repurchases, bringing the total buyback authorisation to US$17.1 billion.

 
  • Netflix adds a record 18.9 million subscribers in the holiday quarter, surpassing expectations.

  • Price increases announced for service plans in select countries to support expanding programming.

  • Investors react positively, with Netflix's stock surging by approximately 13% in extended trading.


Source: REUTERS

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