The end of the previous year saw a sharp increase in Netflix sign-ups as users created their own accounts in response to the company’s crackdown on password sharing.
In the three months that concluded in December, the streaming behemoth added over 13.1 million new subscribers.
That continued a trend of growth that began last year, and it was the highest for any quarter since 2020.
Netflix declared that it planned to raise prices and that it was confident in its growth trajectory.
“We largely put price increases on hold as we rolled out paid sharing. Now that we’re through that, we’re able to resume our standard approach,” co-chief executive Greg Peters said on a call with analysts to discuss its latest quarterly update.
“The summary statement might be, ‘back to business as usual’.”
Several of its new members chose the lowest plan offered by the company, despite the possibility of seeing advertisements.
According to Netflix, the plan accounted for 40% of new sign-ups in the 12 countries where it offers advertisements, which include some of its largest markets like the US and UK.
The company’s gains are an ironic turn of events considering that for years it opposed calls to sell advertisements, claiming that doing so would negatively impact viewer experience and complicate operations due to privacy concerns and other issues.
However, the business was taken aback by an unanticipated drop in subscribers in the first half of 2022, which was followed by a decline in profits. This forced the business to look for new strategies to attract more viewers and revenue.
As well as adverts and the password crackdown, it is experimenting with more live events to bring in new audiences.
On Tuesday, it announced a 10-year, $5bn (£3.9bn) deal to bring WWE Raw – pro-wrestling’s most popular weekly show – to the platform.
Many of its rivals are making similar moves.
Amazon, for example, is trying to boost its slate of live sports events. It is also due to start showing adverts to Prime members when they watch starting this month, unless they pay $2.99 extra per month.
Paolo Pescatore, an analyst at PP Foresight, said the numbers validated Netflix’s strategy.
“Another cracking quarter to finish the year,” he said. “These latest results reaffirm that Netflix is firmly the king among all streamers.”
Netflix charges £4.99 in the UK and $6.99 per month in the US for the standard plan with adverts, compared with £10.99 and $15.49 without.
It said it did not expect advertising to contribute meaningfully to growth this year.
But the programme has sparked excitement on Wall Street since selling ads, on top of subscriptions, has the potential to bolster the money a company can earn per account.
Netflix had already hinted that the plan was gaining traction, claiming earlier this month that it had more than 23 million accounts, compared with 15 million in November.
Still, the number of new subscribers it added in the quarter also surprised analysts, who had worried that sign-ups would suffer without the release of a stand-out hit.
According to Netflix, its lineup of shows was impressive and included popular shows like Adam Sandler’s Leo and the Beckham documentary series.
On Tuesday, the platform was nominated for eighteen Oscars, including “Best Picture” for Bradley Cooper and Carey Mulligan’s film Maestro.
After hours trading saw a more than 6% increase in shares.
In 2023, Netflix recorded revenue of over $33.7 billion, indicating a growth of over 6% from the previous year.
The year’s profits came in at $5.4 billion, up from $4.49 billion the year before.
