Netflix handily beat Wall Street estimates when it reported adding 13 million subscribers to end 2023. This brings the platform’s total number of subscribers to over 260 million globally. The company’s stock price rallied by more than 10% in response to the positive results. However, this might be a sign that Netflix is expanding its moat as the undisputed streaming and entertainment leader in 2024 and beyond, rather than a bullish signal for the streaming business more broadly.
The final quarter of 2023 marked the fourth consecutive quarter of slowed output from streaming services collectively. Each quarter of 2023, the rate of new streaming original series premieres slowed down. In the middle of the year this could be attributed fairly directly to the dual strikes paralyzing Hollywood, but it does not look like there was a quick rebound in the number of new shows in the final months of the year.
While the broader market may have slowed down its content pipeline, whether as a result of the strikes or in a bid to improve profitability, Netflix bucked the trend and had a greater number of new series premiere in Q4 than in any other quarter this year. Combined with significantly fewer premieres on competitive platforms, Netflix’s increased output translated to a large jump in the share of new series premieres. This increase in new content likely gave Netflix an advantage in attracting subscribers.
In Q4 2023, Netflix grew its demand share for original series with global and US audiences for the first time in over four years, since before Disney+ and Apple TV+ launched. The wave of new content this quarter helped Netflix reverse the trend of losing U.S. market demand share to the competition. The last time it was able to turn the tide in the U.S. (even if only for a single quarter) was in Q3 2022 when the return of “Stranger Things” gave the platform a massive boost in audience attention.
In Q4 2023 Netflix managed to gain market demand share without new episodes of “Stranger Things,” “Wednesday” or “The Witcher.” Does this point to a more sustainable shift? A single data point does not make a trend but we will be watching how the rest of this earnings season shapes up for the streaming industry to see if the competition is on a divergent path from Netflix.
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