Industry Insider: Netflix’s Dominating 4th Quarter Earnings Call
Nextflix’s Q4 earnings call was recorded on January 23, 2024 and this final quarter is meant to cover up until the last day of 2023. The call was available on a livestream through the streaming platform’s youtube channel. The structure of the call has been geared more to a Q&A format, with queries supplied by the analyst community. Spencer Wang, VP of finance, led the interview with both CEOs, Ted Sarandos and Greg Peters, in attendance along with CFO, Spence Neumann.
This final quarter has seemingly brought about unprecedented ventures for Netflix as mentioned by their acquisition of partial rights to WWE Raw. Sarnados comments that adding RAW to their sports lineup has given an amplifier to the live programming segment at Netflix. With a committed multigenerational audience backing the property it isn’t a surprise of its success thus far. However, with the power of this corporation Sarandos’ priority is to catapult RAW to a global stage.
In terms of the global market, Neumann specifies the positive effect of the $13 million plus net ads that were exceptionally effective in EMEA regions. Netflix is known to perform at a high achieving rate with the constant flow of content to engage with across the platform. The diversity in programming with series such as Elite, Money Heist: Berlin, and Nowhere in Spain which helped to pull in a revenue of 13% FX neutral growth. This was also a peak in reference to the 70% quarter over quarter growth seen throughout the year. With a precedent as large as this, the expectations for 2024 will only increase year over year. Netflix’s position in the international market will solidify this potential as recognized by Peters. When he proves a peak at Netflix’s forward looking statements,“..We're focused on the long-term revenue potential here. We're very optimistic about it. It's a huge opportunity, $180 billion of ad spend ex-China and Russia; 25 billion alone on connected TV. We know ad dollars follow engagement.”
Netflix continues to be satisfied with the cracking down on password sharing. The paid sharing feature seemingly had an impact on the common household as it fuels higher engagement marks. All of the data has been disclosed on a title by title basis. So, in holding space for the change in the company’s subscription model the typical price increase across tiers were halted but have resumed in this last quarter. The success of both price increases and paid sharing have been measured as a success in the U.S, U.K, and France.
In a post SAG and WGA strike industry, the subscription structure wouldn’t be Netflix’s only adjustment. The company is looking forward to recalibrating back to a $17 billion cash content expenditure standard. Which could be achievable with the high profiled properties attached to the brand across its sectors in sports, gaming, film, and television. As it stands, Netflix will always have an impressive stack of titles every year. In 2024, Bridgerton, Emily in Paris, and Squid Game return for another anticipated season. While Netflix also gears for newer properties such as Avatar: The Last Airbender, Damsel, The Gentlemen, and Beverely Hills Cop 4.
Netflix remains at the top of the streaming industry for their diverse portfolio that continues to keep consumers engaged. Even with the potential setbacks in 2023, the company was able to weather through by adaptability as it has come to be known for. At the head of the game the leaders at Netflix realize this and protect the integrity of the brand by never underestimating their reliability on loyal consumers.
