Netflix’s subscriber growth is picking up again
Netflix 4Q Subscribers Increase, Longtime CEO Passes the TorchBy MICHAEL LIEDTKEAP Technology WriterThe Associated Press
Netflix’s subscriber growth is picking up again, providing an early sign that its move to include ads in a cheaper version of its streaming video service is helping it fight off tougher competition and attract struggling cost-conscious customers. with inflation.
The company on Thursday revealed a gain of 7.7 million subscribers during the October-December period, a stretch that included the debut of an ad-supported option for $7 a month – less than half the price of its most popular ad-free plan. The performance followed subscriber earnings which beat analysts’ modest expectations in the July-September period which followed Netflix’s second straight quarter of customer losses.
After regaining its momentum, Netflix also announced that its co-founder Reed Hastings will relinquish his title of co-CEO, completing a transition that began in July 2020 with the appointment of its head of programming, Ted Sarandos, as co- CEO. Greg Peters, chief operating officer of Netflix, will join Sarandos as co-CEO while Hastings will become executive president.
Hastings, 62, was the chief executive officer of Netflix for more than 20 years after taking the role from his friend and fellow company co-founder Marc Randolph in the late 1990s.
In the a blog postHastings said he, Sarandos and Peters have “all learned to bring out the best in each other. I look forward to working with them in this role for many years to come.”
Netflix’s subscriber recovery didn’t boost profits, especially as the strong dollar weighed on international results. The Los Gatos, Calif., company earned $55.3 million, or 12 cents a share, during the fourth quarter, a 91 percent decrease from the same period a year earlier. Revenues increased 2% year-over-year to $7.85 billion, a modest gain that suggests some current subscribers may have switched from a more expensive plan to the lower-priced ad-supported option.
Earnings fell below forecasts by analysts who shape investor expectations. But investors appeared to be more focused on subscriber earnings which were far above projections. Shares of Netflix rose 6% in extended trading to $335.01. The stock price has doubled since its five-year low of $162.71 reached last May, but is still far short of its all-time high of nearly $701 in November 2021.
