The announcement of a record 18.9 million new subscribers during the holiday quarter drove Netflix's stock up 13 percent to an all-time high. The jaw dropping gain happened because the company integrated sports content into their offerings and the moves were a success. And sports has been a game changer for expansion into that, because they’ve added so many subscribers and since Netflix is so dominating in the streaming space.
Netflix Hits Record High with Unexpected Subscriber Growth
The company, which also announced price hikes in the U.S. and other markets, has recently moved away from subscriber growth and started to emphasize revenue per user. But since then, the company is now prioritizing other performance metrics – like sales – while continuing to grow its global subscriber base. They’re a reflection of a new Netflix strategy aimed at ensuring that the growth is not just increasing the number of users, but that it will also be profitable in the long term.
Competitors in the streaming wars struggle, but Netflix continues to do as it pleases. Analyst Laurent Yoon from Bernstein said that the surge in subscriber numbers was so impressive it was initially seen as a mistake. Now with subscribers worldwide at 300 million plus, Netflix has cemented itself as head of the class when it comes to streaming services, as other services scramble to play catch up.
Both the surge in subscribers and its new strategy have put Netflix in a position to take over not just streaming but advertising landscapes as well. Netflix has more leverage to negotiate marketing firms now that it's known the ad supported model is so popular. It puts the company in a strong position on the path to profitability, given the size of the computing ad market, to be a major player in the entertainment and advertising sectors.
But as Netflix keeps outpacing competitors, its market value has soared and is now more than the combined values of major rivals like Disney, Comcast, Paramount and Warner Bros Discovery. If the gains stick, Netflix could go for more than $50 billion richer to cement its place as the one and only leader in the streaming wars. It is a formidable force in the entertainment business due to the company’s strong performance and strategic shifts.
Netflix Soars to Record High, Poised for Stock Split Amid Subscriber Growth
Netflixis stock is soaring to an all time high of $988 early morning trading on Wednesday, opening the potential door for a stock split. The fact that the streaming giant’s strong performance has rocketed its market value to new highs, this rash mark a much significant milestone for the streaming giant. At a time when the marketplace is looking at Netflix poised to climb some more, the record stock price comes.
For the company, the conclusion of 2024 will bring 302 million global subscribers, making it the streaming wars leader. Strategic content additions — including a big push into live sports -- are driving the high growth in subscribers. It’s also helped Netflix expand its reach globally and cement its position as the top dog in a space that used to be dominated by rivals.
The expansion of Netflix into live sports — high profile events like a Jake Paul vs Mike Tyson fight — has been a key driver of subscriber growth. And the debut of NFL games on Christmas Day with huge ratings for a star studded half time show with pop icon Beyonce introduced millions of new viewers, proving Netflix could attract high profile content. But these events have been successful in expanding Netflix’s audience beyond the usual from entertainment.
The strategic content additions have driven more than a 80% surge in Netflix’s stock price last year and reflected the robust investor faith in the company’s future. Now its market value has surpassed its competitors in the entertainment sector, thanks in large part to the rise in stock value. And Netflix is only the latest to establish itself as the streaming industry’s heavyweight, thanks to a convergence of growing content and strong financials.
In 2025, Netflix’s trajectory appears set to continue on an upswing thanks to its robust subscriber growth and fast escalating market capitalization. It could also boost the company’s stock price further after a stock split becomes possible, maximizing investors’ touches with the stock. Netflix’s ability to innovate and add new areas, like live sports, ensures that it will remain a strong force in both the streaming and entertainment markets for years to come.
Netflix Breaks Streaming Records with Sports and Hit Content Slate
The Nov. 15 boxing match between Tyson and Paul was recently in the news after becoming the most streamed sporting event in Netflix history. It also saw the most sign ups for Netflix since data tracking started in 2019 — the event attracted millions of viewers. The success extended beyond the fight, with the release of popular content that had kept subscribers interested during the quarter: the second season of "Squid Game," and the hit theatrical "Carry On."
Realizing the company’s growing presence in live sports, more specifically special events like Tyson-Paul, is proving to be a key strategy to better both a subscriber growth and viewership. Sports rights, however, typically come with high prices and Netflix has wisely chosen to stick to high profile, one day only events with a view to squeezing out the most exposure with minimal cost for the streaming giant. Advertisers, too, have jumped onto this bandwagon, excited to reach the audience for Netflix’s growing lineup of sports activations.
Even more potential could open up in the future once Netflix learns the latest tactic for securing special event sports rights: paying for them, says Dan Coatsworth, analyst at AJ Bell. Coatsworth says that sports will play a continued role in directing streaming traffic, and that, soon, Netflix will be doing some bidding to secure more major sports rights just to remain competitive. Set to future growth in the sports streaming market, the company success in this arena will play a part.
As well as sports, original content is still king for Netflix. Among the reasons why Netflix's content slate has continued to be fresh and appealing to a diverse audience have been the release of season two of "Squid Game," which thrilled the world over, as well as "Carry-On." Netflix is now confirming its leadership in the entertainment industry by combining blockbuster originals with live sports events.
With its latest move, then, Netflix has another step forward in establishing itself as a sports company in its own right, not just as a pure title distributor. Netflix is set to grow its subscriber base and attract new viewers as it undergoes continued innovation in a mix of live sports, original content and strategic partnerships to make a successful 2024 and beyond.
Netflix's Subscriber Growth Surges, but Revenue Falls Short of Expectations
Netflix reported another quarter of strong subscriber growth, far above expectations, adding millions of new users last quarter. But that subscribers flood did not lead to a chugging revenue as investors worried. But the better revenue beat wasn't as good as expected, and subscriber growth was much better than predicted, suggesting problems with revenue per user.
'The influx of subscribers from lower average revenue per user (ARPU) countries and the growing trend toward the ad supported tier will create a revenue shortfall,' said Ben Barringer, a technology analyst at Quilter Cheviot. The factors that drove subscriber growth didn't produce the same level of revenue as higher priced customers, which made sense for the narrower than expected revenue beat.
But the price hikes on both units that have happened and on the one due early next year should help maintain revenue in the coming quarters, Barringer wrote, citing the concern. The price increases that are expected will help offset the impact of lower ARPU countries and are projected to produce stronger revenue growth going forward. If the company adjusts it’s pricing strategy, it may realize much bigger gains in the future.
Moving forward, next Netflix is going to continue attracting viewers to its roster of upcoming highly anticipated content including new seasons of the hugely popular shows like 'Stranger Things,' and 'Wednesday'. The company has also started streaming WWE's "RAW," marking more of the company’s efforts to expand its the content offerings. Clearly, with these new releases, Netflix is likely to continue to see strong subscriber growth and further yet growing engagement with its platform.
At least 24 analysts have raised their price targets on the company's stock, which is already seeing some positive momentum. Confidence in Netflix stock's long term potential has pushed the median target up to $1,025. As a comparison, Netflix's forward price-to-earnings is 35.43, far above competitor Walt Disney, and highlights Netflix's strength in the streaming market.