In the fourth quarter of 2023, Netflix's paid subscriber growth reached a staggering 13 million, beating market expectations by 50%. This growth not only cemented Netflix's leading position in the streaming wars, but also reached 2600 million paying subscribers. When the number of Netflix subscribers decreased for two consecutive quarters in 2022, the company fell into a growth dilemma and its market value fell sharply. In an effort to reverse the decline, Netflix has made a series of decisions, the most notable of which is to start the path of ad revenue.
The dividends of the epidemic are gradually dissipatingAs rivals Disney+ and HBO Max stepped up their efforts to compete for subscribers, Netflix was once stuck at a ceiling of subscriber growth。The sharp decline in the company's price-to-earnings ratio is a direct reflection of investors' concerns about its uncertainty. In order to embrace change,In the second half of 2022, Netflix launched low-cost ads with ads** and stepped up its crackdown on shared accounts. This series of measures has achieved remarkable results in a short period of timeThe new ad-loaded app attracted 5 million subscribers in six months, making it one of Netflix's most popular.
The ad-based launch** wasn't just a spur of the moment, but Netflix's insight into market trends and user needs. At the same time as the growth of users, the average monthly contribution (ARPM) of customers with ads** has become the key to the company's "secondary growth".。At the same time, Netflix's technical restrictions on shared accounts have also made it possible for the company to tap into more new subscribers, driving an unexpected surge in subscribers. The success of the strategy was evident in the Q4 2023 earnings report, with average monthly customer contributions increasing in both North America and Europe.
Netflix's top priority for advertising is "scale," which means attracting a large enough audience to attract larger advertisers. Ad-included** is adding ads at a much faster rate than non-ad**, largely due to increased demand for subscriptions to multiple stream** services. With the increase in the number of streaming subscriptions, ad-included became an economic choice for households, building a fast-growing ad audience for Netflix. **Shows that from 2024 to 2026, nearly half of Netflix's new revenue will come from ads**.
While Netflix has managed to emerge from its growth woes, the company is still exploring the "three growth curves" ahead. The 10-year agreement with WWE, the launch of live cooking and the launch of the gaming business are all important steps in the company's future expansion。Netflix's partnership with WWE not only increases the value of advertising, but also gives the company experience in entering the live sports space. At the same time, the company's exploration of the gaming business marks a potential growth point. While Netflix games are currently being used on a small scale, the company is looking for appropriate ways to expand its business.
Netflix's advertising strategy has not only successfully reversed the decline in subscriber growth, but also brought new growth momentum to the company. Through clever pricing and technology, Netflix has successfully attracted more users, increased the average monthly contribution of customers, and opened a new chapter in the company's advertising business. In the future, Netflix will continue to explore diversified business areas to adapt to the changing market and user needs, and ensure that it remains ahead of the fierce competition for streaming**.
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