2024 was a record-breaking year for the streamer, surpassing even 2020’s pandemic-fuelled subscriber rush
Netflix (NASDAQ:NFLX) stock rallied 14% in the premarket hours on Wednesday after the streaming giant impressed Wall Street with record quarterly subscriber growth, attributed in part to a successful launch of live programming.
As Netflix stock approached $1,000, traders hailed the company’s addition of 18.9 million subscribers in Q4 2024, its single largest quarterly gain, comfortably dwarfing analyst estimates of 9.2 million.
In light of this emphatic success, Netflix announced this week that it would hike prices for customers in the United States, Canada, Portugal, and Argentina. Specifically, the streamer will raise the monthly price of its advertisement-supported subscription plan from $6.99 to $7.99, its ‘Standard’ ad-free plan from $15.49 to $17.99, and its ‘Premium’ plan from $22.99 to $24.99.
“The strength of [content] has never been better”, remarked CEO Ted Sarandos on the company’s earnings call, hailing the success of projects like Stranger Things and Happy Gilmore 2.
Global sensation Squid Game has also played a major role in Netflix’s recent success, with the show’s second season on track to become the streamer’s most-watched original series to date.
Netflix has also recently sharpened its focus on live programming, including NFL games and upcoming FIFA Women’s World Cups.
In addition, a boxing match between controversial YouTuber Jake Paul and former championship boxer Mike Tyson in November 2024 delivered Netflix a record number of sign-ups for a single day.
“Our newly established live programming slate has already delivered some must-watch moments,” Netflix’s management wrote in a letter to the company’s shareholders.
The “eventized nature” of Netflix’s live-streamed programs “will result in outsized value to both our members and our business”, the letter added.
Analysis: Too early to declare victory for “must-watch” programming
Naturally, Netflix’s management seeks to present its live programs as must-see events. Whether Netflix can replicate the anticipation surrounding the Paul-Tyson boxing match remains to be seen, however.
Also, remember that Netflix’s Q4-2024 widely viewed live-streamed events occurred before the upcoming subscription price hikes. Optimistic onlookers may be hasty in assuming that consumers will gladly tolerate Netflix’s upcoming price increases.
Besides, let us not overlook Netflix’s admission that its live-streamed content “will likely be a small percentage” of the platform’s viewing time. For the foreseeable future, scripted content will remain Netflix’s bread-and-butter programming.
Finally, Netflix won’t be able to match its fourth-quarter performance. The company delivered twice as many new subscribers as Wall Street’s analysts had expected, a rare feat that will undoubtedly be hard to surpass.
It’s not up to Netflix’s management to deem its live programs “must-watch” events. Only the consumers can determine whether they “must” watch these programs. What’s clear is that going forward, Netflix needs to continue delivering outstanding results or risk disappointing its eager shareholders.