24 January 2024
If you are covering Netflix’s latest financial results, please find below a comment from Ben Barringer, technology analyst at Quilter Cheviot:
“Having completed its turnaround story last year, Netflix is now firmly back on a growth trajectory with really strong subscriber numbers in the last quarter of 2023. The streaming company added 13m new subscribers and is now guiding to increased margin as it keeps content costs stable, while driving further sales and subscriber growth throughout the year.
“These numbers underscore the fact that Netflix has ultimately won the streaming wars. Legacy TV business simply have not been able to keep up and with many more returning to licencing their back catalogue to Netflix, their reliance on the streaming giant is only going to grow. The other part of the story is that Netflix still has plenty of levers left to pull to stimulate more growth.
“Gaming is growing nicely, while it has moved beyond dipping its toe into the water in the world of sports and is looking for new and innovative ways to produce content there. The crackdown on password sharing has also worked, without going too hard on customers and thus we should see more activity there, while its advertising tier has had a decent start. Netflix is investing in the technology that sits behind the ads to better serve customers and advertisers. Given 9% of customers are currently paying for this service now, if it reaches to around 40%, that will be a very good result for Netflix.
“Despite the strength in share prices of the big tech companies last year, businesses like Netflix simply keep delivering. While it has won the streaming wars, it still has a number of growth drivers behind it which make us believe that this long-term story is far from over.”
