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Netflix, Inc. (NASDAQ: NFLX) announced its fourth quarter and full year financial results ending December 31, 2023, and the results are noteworthy. The OTT streaming giant recorded a 12.5% year-on-year and 3.4% quarter-over-quarter increase in global operating revenue, hitting a record high of $8.83 billion in Q4 2023. . Netflix’s net income for the fourth quarter of 2023 soared to his $937.84 million, a significant increase. That’s up from just $55.28 million in the same period last year. However, on a quarterly basis, this is a significant 44.1% decrease from the $1.68 billion in net income generated in Q3 2023.
From a broader perspective, Netflix’s global revenue for fiscal year 2023 hit a new high of $33.72 billion, a modest 6.7% year-on-year increase. Net profit for the same year also increased to $5.41 billion, an increase of 20.4% from the previous year.
Key highlights: Netflix streaming subscribers
- Netflix’s worldwide paid streaming membership reached an astonishing 260.28 million by the end of December 2023., an increase of 12.8% from the previous year. The streaming giant added 29.53 million new paid subscribers worldwide throughout the year.
- Net additions to Netflix paid members worldwide were 1.75 million in the first quarter of 2023, 5.89 million in the second quarter, 8.76 million in the third quarter, and 13.12 million in the fourth quarter.
- Over 34% of Netflix’s total paid users are from the Europe, Middle East and Africa (EMEA) region, totaling 88.8 million as of December 2023.
- Approximately 30.8% of Netflix’s paid streaming users are from the US and Canada region, totaling 80.13 million as of December 2023. This is followed by those from Latin America with 46 million (17.7% of the total) and 45.34 million (17.4% of the total). ) from the Asia Pacific (APAC) region.
Revenue from Netflix users
In 2023, Netflix generated an average of $43.45 in revenue per paid streaming member worldwide. However, compared to the average revenue of $43.83 per membership generated by OTT platforms in 2022, revenue was down slightly by 0.87% year over year.
The decline in Netflix’s average revenue per paid subscriber is due to a decline in revenue per user from the Asia Pacific (APAC) region, even though the region is the most populous region in the world. is the main cause.Created by the streaming giant The cost per APAC user in 2023 will be just $7.64, a significant 10.1% year-over-year decrease.
Breaking down the financial metrics, approximately 37.5% of Netflix’s total revenue per paid user in 2023 will come from the US and Canada, amounting to $16.28. The EMEA region accounted for 25% of the total, and each paid subscriber earned him $10.87 in revenue over the year. Latin America follows suit, accounting for his 19.9% of Netflix’s total revenue per streaming user, totaling his $8.66 in 2023.
strategic move
Netflix’s quest for streaming supremacy includes not only top-notch content production, but also strategic marketing efforts, especially intensified each year during the holiday season. One of the main drivers of subscriber growth is strategic marketing spend. In the fourth quarter of 2023, Netflix’s marketing expenses increased significantly by 64.1% quarter-over-quarter and 10.2% year-over-year to $916.62 million.
Note that each year, Netflix strategically allocates more marketing resources in the fourth quarter than in each of the previous three quarters, intensifying its efforts to capture the attention of viewers during the Christmas season. is important.
In addition to strategic decisions, Netflix’s bold move to crack down on password sharing, despite facing criticism, played a key role in expanding its subscriber base. This initiative acted as a catalyst, encouraging more people to purchase subscriptions on their own. The streaming giant is introducing fees for additional users beyond the primary account holder in certain regions, resulting in a direct increase in revenue from existing subscribers.
In the world of OTT streaming, Netflix’s prominence is undeniable. The company continues to adapt to the ever-expanding landscape of content production, user engagement, and strategic marketing, and its financial results highlight the company’s resilience and adaptability in the highly competitive global OTT streaming industry. I’m doing it.
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