Netflix Adds Record 13.1 Million Q4 Net Subscribers, Ended 2023 with 260 Million Paid Members

Netflix Jan. 23 reported record fourth-quarter (ended Dec. 31, 2023) subscriber growth, adding more than 13.1 million net global subscribers, ending the year with more than 260 million paid members. Netflix had projected quarterly sub growth of 9 million. The streamer added 30 million paid members in 2023.

Subscriber growth included 2.81 million new subs in North America; 5.05 million new subs across Europe and the Middle East; 2.35 million in Latin America and 2.91 million across the Asian Pacific region.

Quarterly revenue increased 12.5% to more than $8.83 billion, with net come totaling $938 million, compared with net income of $55 million in the previous-year period.

Wall Street applauded the results, sending Netflix shares up 10% to a two-year high of $541 per share in after-market trading. Netflix shares closed Jan. 23 at $492 per share.

“We enter 2024 with good momentum,” Netflix co-CEOs Ted Sarandos and Greg Peters wrote in the shareholder letter. “We expect healthy double digit revenue growth for the full year 2024 on a F/X neutral basis, driven by continued membership growth as well as improvement in F/X neutral ARM as we adjust [subscription] prices.”

The executives said Netflix would continue to invest in and build its ad-supported streaming business, with expected strong growth in 2024, tempered in part by a small base in 2023.

“It’s not yet a primary driver of our overall revenue growth,” Sarandos and Peters wrote. “Our aim is to make ads a more substantial revenue stream that contributes to sustained, healthy revenue growth in 2025 and beyond.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Netflix, which earlier in the day announced its first live sports distribution deal, in a long-term $5 billion pact with World Wrestling Entertainment for its weekly “Raw” pro wrestling series, in addition to exclusive international access to its licensed programming and pay-per-view live events, remains the benchmark other media companies and streamers strive to emulate.

GameStop Posts Surprise $48 Million Quarterly Profit

GameStop, the world’s No. 1 brick-and-mortar video game retailer, March 21 reported unexpected fourth-quarter (ended Jan. 28) net income of $48.2 million on revenue of $2.22 billion. That compared with a loss of $147.5 million on revenue of $2.25 billion during the previous-year period.

The Grapevine, Texas-based chain said it generated net sales of $5.93 billion for the fiscal year, compared with $6.01 billion for fiscal-year 2021. The company narrowed the fiscal loss to $313.1 million from a net loss of $381.3 million in 2021.

Matt Furlong

Hardware and accessories in the quarter accounted for 55.8% ($1.238 billion) of total sales compared to 52.7% ($1.185 billion) a year ago, while software sales fell to 30.1% ($668 million) from 34.9% ($785 million) a year earlier.

GameStop continues to make inroads into collectibles, generating 14.1% ($313 million) in sales of memorabilia, dolls, action figures, posters and T-shirts, among others, compared with 12.4% ($279 million) a year ago. The chain generated another $4.5 million in digital sales.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“Collectibles is an area in which the company continues prioritizing long-term growth,” GameStop said in a statement.

On the fiscal call, CEO Matt Furlong said GameStop would continue exiting select European markets going forward in an effort to streamline operating expenses.

“Although there is a lot of hard work and necessary execution in front of us, GameStop is a much healthier business today than it was at the start of 2021,” Furlong said. “We have considerable cash on hand, negligible debt, streamlined inventory and a path to full year profitability. Our plan is to use this strong positioning to continue delivering a unique customer experience and long-term stockholder value.”

Wall Street jumped at the news, sending GameStop shares up almost 35% in after-market trading at $23.95 per share.

Best Buy Q4 Entertainment Revenue Inches Up $2 Million

Best Buy March 2 reported fourth-quarter (ended Jan. 23, 2023), entertainment revenue of $1.21 billion, which was up $2 million from the previous-year period.

The segment, which includes products such as DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software, saw comparable store sales increase 0.2%, compared with a 9.5% drop in the previous-year period.

Overall, the nation’s largest consumer electronics retailer realized a $1.46 billion decline in domestic quarterly revenue to $13.5 billion, from $14.9 billion in the prior-year period. For the fiscal year, sales dropped almost 11% to $42.8 billion, from $47.8 billion in the previous fiscal year.

“We believe the macro and industry backdrop will continue to be pressured in FY24 and we will continue to adjust,” CEO Corie Barry said in a statement. “At the same time, we remain incredibly excited about our industry and our future — there are more technology products than ever in peoples’ homes, technology is increasingly a necessity in our lives, and technology innovation will continue.”

CFO Matt Bilunas said the comparable sales outlook decline from 3% to 6% for the year is expected to improve after the first quarter.

“Most year-over-year [sales] comparisons [should] ease through the year,” Bilunas said.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Hasbro Entertainment Unit Posts Q4 Income, Revenue Declines; Still Looking for eOne Buyer

Game and entertainment manufacturer/distributor Hasbro Feb. 16 reported entertainment revenue of $334 million in the fourth quarter (ended Dec. 25, 2022). That was down about 12% from revenue of $379 million during the previous-year period.

The business unit, which includes movie and TV show production, saw content revenue decline to $310.6 million, from $345 million, with unit operating income dropping 17% to $25.1 million, from $32.7 million in the previous-year period.

Film and TV revenue declined 10% reflecting lower film revenue with fewer new releases in 2022 vs. 2021 and the timing of deliveries. TV revenue increased behind strong scripted TV deliveries.

For the fiscal year, film and TV production/license revenue declined 17% to $828.7 million, from $997.7 million in 2021.

Hasbro said it remains committed to selling Entertainment One (eOne), the Canadian movie/TV production company it acquired in late 2019 for $4 billion under former CEO Brian Goldner, who died from prostate cancer in late 2021.

New CEO Chris Cocks wants to streamline the company’s entertainment content production and return to legacy game creation as part of his Blueprint 2.0 operating strategy.

“As we announced previously, our fourth quarter and full-year 2022 results came in below our expectations,” Cocks said in a statement. “Our strategy is centered on what makes our brands great — play, supported by compelling storytelling and disciplined brand management.”

Retiring CFO Deborah Thomas said Hasbro remains focused on investing in higher return brands and projects, ending low-return initiatives, modernizing the organization and lowering its cost base.

“We forecasted a challenging 2022, and that came to fruition,” Thomas said.

Roku Reports Increased Q4 Subscribers, Streaming Hours as Device Sales Plummet

Subscription streaming video pioneer Roku Feb. 15 said it generated a 16% increase in active user accounts to 70 million in the fourth quarter (ended Dec. 31, 2022), from 60 million at the end of 2021. Streaming hours increased 23% to 23.9 billion hours, from 19.5 billion in the previous-year period.

San Jose, Calif.-based Roku also disclosed that its legacy consumer electronics business revenue dropped 18% to $135.8 million, from $166.4 million in the previous-year period. The devices division’s operating loss remained constant at $43.6 million, compared with an operating loss of $44 million during the previous-year period.

Average revenue per platform user grew to $41.68, up 2% from ARPU of $40.86, which is based in part on third-party SVOD revenue.

The company’s flagship free ad-supported streaming TV/AVOD platform The Roku Channel ended 2022 with 100 million U.S. households. In June, Roku launched Spanish-language programming in the U.S. with Espacio Latino, followed by Kids & Family en Español. In Q4, Roku bowed The Roku Channel to Mexico, where it has become the channel’s largest international market.

For the quarter, revenue was flat at $867 million, while the net loss ballooned to nearly $250 million, from a profit of $21.4 million in the previous-year period.

“While cyclical economic pressures are affecting our business, two things
remain true: the secular trend supporting our business remains intact, and the combination of our scale, engagement, and innovation position Roku exceptionally well to benefit when the market rebounds,” founder/CEO Anthony Wood and CFO Steve Louden wrote in the shareholder letter.

WWE Reports Uptick in Peacock, Netflix, Hulu Content Licensing Revenue

World Wrestling Entertainment said it has a new streaming hit with the recent release of Netflix original Spanish-language series “Against the Ropes” (“Contra las Cuerdas”), about a paroled ex-convict mother (Caraly Sánchez) in Mexico who becomes a professional wrestler to win back respect from her young daughter (Alisson Santiago).

The series, released Jan. 25, is now the No. 1 streamed program on Netflix in Mexico, according to WWE CEO Nick Khan. Speaking on the Feb. 2 fiscal call, Kahn said the scripted half-hour comedy in just two days of release was the third most in-demand show in Mexico.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“That’s not just on Netflix, but of all new series premiering on any Mexican platform,” Khan said. “It quickly rose to No. 2 on Netflix’s top 10 shows watched in Mexico.” Citing data from Parrot Analytics, Kahn contends the show is in the top 10 in six other countries.

Separately, production is underway on WWE’s new Hulu documentary series featuring married WWE Superstars Bianca Belair and Montez Ford. The eight-episode docuseries from WWE Studios will be rolling out on Hulu later this year.

Bianca Belair and Montez Ford (Disney photo)

In Q4, WWE’s free YouTube channel topped 92 million subscribers and remains the most popular sports channel on the social media platform, according to Khan.

“We are one of only 10 channels on YouTube to surpass 90 million subscribers,” he said, adding that WWE also surpassed 20 million followers on its flagship TikTok account, making the brand the first sports league to reach that milestone.

Since licensing distribution rights to its branded WWE Network subscription streaming VOD service to NBCUniversal’s Peacock platform in March 2021, the service helped increase WWE’s fourth-quarter (ended Dec. 31, 2022) media revenue 39% to $47.1 million, from $33.9 million in the previous-year period.

Network revenue for the 12-month period, which includes the upfront revenue recognition related to the delivery of certain WWE Network intellectual property rights to Peacock in the first quarter, reached $222 million, down from $225 million in 2021.

Revenue related to certain live in-ring programming content in international markets, scripted, reality and other programming, as well as theatrical and direct-to-home video releases, increased 18.4% to $61.7 million, from $52.1 million in the previous-year period.

Amazon Reports 17% Uptick in Q4 Digital Entertainment Revenue; Content Spend to Reach $7 Billion This Year

Amazon Feb. 2 reported a record $9.19 billion in fourth quarter (ended Dec. 31, 2022) subscription revenue, which was up 17% from revenue of $8.12 billion in the previous year period. Subscription revenue includes sales of transactional VOD and electronic sellthrough video, music, audiobooks and Prime memberships.

Notable Prime membership drivers included Amazon’s exclusive distribution of NFL “Thursday Night Football,” which required a Prime Video subscription to access, as well as the original series “The Lord of the Rings: The Rings of Power.”

Over the quarter, more than 100 million viewers worldwide streamed the first season of “The Lord of the Rings: The Rings of Power,” making it the most-watched Amazon original series in every region of the world, with more than 24 billion minutes streamed, and driving more Prime sign-ups worldwide during its launch window than any previous Prime Video content, according to Amazon.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Amazon Studios also announced the all-female slate of directors — Charlotte Brändström, Sanaa Hamri, and Louise Hooper — for season two of the series, which is currently in production in the United Kingdom.

“Thursday Night Football” finished with the youngest median age of any NFL broadcast package since 2013, with viewership up 11% from last season among hard-to-reach 18- to 34-year-olds, according to Nielsen
Media Research. “TNF” featured the most streamed NFL games ever, with an average audience of 11.3 million viewers, according to combined data from Amazon’s first-party measurement metrics and Nielsen.

Prime Video premiered several original series and films, including Western drama The English, with Emily Blunt; family-friendly competition show “Dr. Seuss Baking Challenge”; My Policeman, starring Harry Styles; and the documentary Good Night Oppy. Prime Video also released new seasons of existing series, including the fourth volume of Rihanna’s annual
fashion experience “Savage X Fenty” and the third season of “Tom Clancy’s Jack Ryan,” starring John Krasinski.

“Wednesday,” an MGM-produced series exclusively on Netflix, debuted at No. 1 on Nielsen’s weekly streaming charts and earned Golden Globe nominations for Best Musical or Comedy Series and Best Actress in a Musical or Comedy Series (Jenna Ortega). MGM is owned by Amazon.

CFO Brian Olsavsky said Amazon Studios would spend $7 billion on original content in 2023, up from $5 billion in 2021.

Finally, Prime Channels saw the return of HBO Max after reaching an agreement with Warner Bros. Discovery. Max had left Prime Channels in 2021 following a carriage dispute, causing it to lose 5 million subscribers in the process.

“It seems Prime members respond to our expanding content offerings,” Olsavsky said on the fiscal webcast. “Video has proven to be a strong driver of Prime member engagement and new Prime member acquisition.”

NBCUniversal’s Peacock Streaming Service Ended 2022 With 20 Million Paid Subs, $2.5 Billion Loss

NBCUniversal’s Peacock subscription streaming/ad-supported video platform ended 2022 with more than 20 million paid subscribers, doubling the service’s subs since the end of 2021. The service ended the previous third quarter with 15 million paid subs. Revenue topped $2.1 billion, up 170% from revenue of $778 million in 2021. Peacock is available free to Comcast Xfinity subscribers and related service members.

On the flipside, Peacock’s pre-tax Q4 operating loss ballooned nearly 75% to $978 million, compared with a loss of 559 million in the previous-year period. Revenue increased 97% to $660 million, from $335 million in the previous-year period. For the fiscal year, Peacock’s operating loss increased 47% to $2.5 billion, from a loss of $1.7 billion in 2021.

Speaking on the Jan. 26 fiscal call, Mike Cavanagh, president of Comcast Corporation, said he expects Peacock’s fiscal loss to plateau around $3 billion this year before declining.

“As we’ve said previously, we believe 2023 will be peak losses for Peacock and from there steadily improve,” he said.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Reed Hastings Steps Down as Co-CEO as Netflix Tops Q4 Subscriber Growth Estimate

Netflix Jan. 19 said it added 7.66 million new subscribers worldwide in the fourth quarter, ended Dec. 31, 2022, topping management’s projection of 4.5 million new subscribers. Netflix ended 2022 with 231 million  global subscribers, up from almost 222 million subs at the end of 2021. The streamer lost 919,000 net North American subscribers in 2022 to end the year with more than 74 million.

But the big news that had tongues wagging was a major leadership shakeup in which co-founder Reed Hastings is ceding the co-CEO spot he’s held for nearly three years to chief operating officer Greg Peters, who now shares that title with Ted Sarandos. Hastings becomes executive chairman.

Also, Bela Bajaria, formerly head of global TV, becomes chief content officer, and Scott Stuber is chairman of Netflix Film. Peters had previously doubled as COO and chief product officer; Sarandos had been chief content officer in addition to co-CEO.

“I want to thank Reed for his visionary leadership, mentorship and friendship over the last 20 years,” Sarandos said in a statement. “We’ve all learned so much from his intellectual rigor, honesty and willingness to take big bets — and we look forward to working with him for many more years to come. Since Reed started to delegate management to us, Greg and I have built a strong operating model based on our shared values and like-minded approach to growth. I am so excited to start this new chapter with Greg as co-CEO.”

Meanwhile, Netflix continues to hit fiscal home runs, generating $31.6 billion of revenue in 2022, up almost 6.4% from $29.7 billion in 2021. The streamer generated $5.6 billion in operating income, $2 billion of net cash from operating activities and $1.6 billion of free cash flow. In 2023, Netflix expects to generate at least $3 billion of free cash flow, assuming no material swings in foreign exchange.

“2022 was a tough year, with a bumpy start but a brighter finish,” co-CEOs Peters, Sarandos and CFO Spencer Neumann wrote in the shareholder letter. “We believe we have a clear path to reaccelerate our revenue growth: continuing to improve all aspects of Netflix, launching paid sharing and building our ads offering. As always, our north stars remain pleasing our members and building even greater profitability over time.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!”

Longtime Netflix Bear Analyst Turns Bullish on Streamer’s Q4 Fiscal Results

Wedbush Securities media analyst Michael Pachter is changing his tune on the future of Netflix. The Los Angeles-based analyst, previously bearish on the streamer’s prospects, now believes its recently-launched lower-cost ad-supported subscription plan should limit churn (non-renewing subs) going forward, while its content strategy appears to be “smoothing out with greater discernment” and a higher mix of original titles.

Michael Pachter

“We think Netflix is poised for significant free cash flow growth in the coming years,” Pachter wrote in a Jan. 17 note.

Indeed, while Wall Street consensus expects Netflix to miss its Q4 subscriber growth guidance of 4.5 million with 4.1 million new additions, Pachter expects the company to exceed guidance by as much as 300,000 subs at 4.8 million, including 1.5 million new North American subs.

“While our [North American] estimate may prove too high, we are confident that Netflix has seen monthly churn of more than 1 million gross subscribers in the region,” Pachter wrote.

The analyst is basing much of his optimism on a commissioned survey of 1,001 respondents, which found that 27% of respondents had switched to the ad-supported option. Notably, 9% of respondents stated that they tried the ad tier but switched back to the ad-free premium tier.

Pachter admits upfront to multiple “guesses” in the analysis regarding the starting point for the subscriber impact of Netflix’s ad-supported tier, which he believes will become more refined following the Jan. 19 fiscal call.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“For now, we will simply state that it is easy for Netflix to achieve ‘positive or break-even’ results should current subscribers trade ‘down’ to the new tier,” the analyst wrote.

Pachter has made a career bucking conventional wisdom when it comes to Netflix. Instead of piling on the SVOD pioneer’s bandwagon, Pachter has pumped the brakes, questioning the service’s free cash flow and hidden costs, among other concerns.

That caution resulted in Pachter being named the stock picker of 2022 (out of 10,000 stock calls analyzed) for “outstanding ability to be able to valuate in a timely manner with both long and short calls” on Netflix’s stock price, according to AnaChart, a New York-based equity research support platform. Pachter hailed the call-out as “pretty flattering” in light of Wall Street’s cut-throat mindset.