Netflix posts record quarter thanks to Squid Game 2, live sports

Los Angeles – Netflix closed 2024 with its biggest quarterly subscriber gain in history, benefiting from its first major live sporting events and the return of Squid Game.

The streaming giant added 18.9 million subscribers in the fourth quarter, according to a shareholder letter on Jan 21. That was more than double what Wall Street expected and brought global subscribers at Netflix to over 300 million. The company’s previous best was 15 million in the first quarter of 2020 – numbers driven by the onset of the Covid-19 pandemic. 

This is the final time Netflix will report quarterly subscriber numbers. Management is trying to get investors to prioritise financial metrics such as sales and profit.

The company reported that revenue grew 16 per cent to US$10.2 billion (S$13.8 billion) for the quarter, the biggest gain since late 2021, and said sales will grow faster than predicted in 2025.

That gain will partly be fuelled by price increases. Netflix is raising its price in the US, Canada, Portugal and Argentina, with the most popular US plan going up to US$17.99 a month, an increase of US$2.50.

Netflix will stop reporting subscriber figures after a surge in new customers from its crackdown on password sharing. Analysts and investors had expected the benefits from that effort to wear off by now, but Netflix just posted its single best year ever, in terms of subscribers addition, netting 41 million new customers.

The company credited a mix of programming, including the hit movie Carry-On and the second season of Squid Game – its most popular series ever. A boxing match between Jake Paul and Mike Tyson delivered a record number of sign-ups, according to the research firm Antenna, dwarfing even Netflix’s first National Football League games. 

“Our newly established live programming slate has already delivered some must-watch moments,” the company wrote in its letter.

“Although our live programming will likely be a small percentage of our total view hours and content expense, we think the ‘eventised’ nature will result in outsized value to both our members and our business.”

Live programming is vital as Netflix builds out its advertising business. The company shows advertising during football and wrestling to all of its members – not just those on the less-expensive, advertising-supported tier.

The streaming giant has had a slow start in advertising and said it will not produce material financial benefits until 2026. The majority of new customers opt for advertising in the 12 markets where it is available.

Steady growth has lifted Netflix shares to record levels. They hit a closing high of US$936.56 in December, though they have retreated since the start of the year. BLOOMBERG