Netflix Sees 19 Million New Subscribers in Q4

Netflix closed out Q4 of 2024 with a record 19 million net new subscribers in the fourth quarter. This marked the largest quarterly membership increase in the company’s history.

Netflix’s strategic content approach drove much of its success. High-profile series like “Squid Game” Season 2 and major live events such as the Jake Paul vs. Mike Tyson fight (the most-streamed sporting event ever) and two NFL games on Christmas Day were key drivers of new sign-ups.

At a video Q&A Tuesday (Jan. 21) during the company’s fourth-quarter and full-year earnings call, co-CEO Greg Peters said, the record membership increase wasn’t due solely to these widely watched live events.

“At a high level, we’ve seen broad strength across content categories, across all regions,” Peters explained. “We’ve seen it throughout the entire year. No single title really draws the majority of our acquisition or engagement.

“Even in an amazing quarter where we had three huge live events, an incredible fight, two NFL games, we had one of our biggest TV series ever in “Squid Game” Season 2, all very successful events and titles that we’re thrilled about, our estimates for subscriber ads driven by those titles combined represent a small minority of our member acquisition in the quarter. It’s really the whole service that’s working that delivered the upside we saw this quarter. The vast majority of our net ads were driven by our broad slate and our portfolio globally.”

Diverse Content Fuels Growth

In 2024, Netflix’s revenue rose 16% to $10.25 billion, and the company ended the year with 302 million memberships. Building on that momentum, Netflix recently announced it secured the U.S. rights for FIFA’s Women’s World Cup in 2027 and 2031. This move signals the company’s commitment to expanding its diverse content offerings. Looking ahead, Netflix is continuing to prioritize its ads-based plan, which has gained traction, Peters said.

“We love our ads plan because it allows us to offer a lower price point for consumers,” he explained. “That’s more choice and good accessibility, and that is proving to be popular. Our ads plan represented over 55% of signups across our ads countries. We’ve seen membership on those ads plans increase about 30% quarter over quarter, on top of 25% the quarter before. We’ve seen significant growth since launch, which we’re excited about.”

What Peters is even more excited about is “the fact that the engagement of those ads members remains healthy. We’ve done the work to meet our scale goals for advertisers in 2025, and that means we’ve been able to make the offering better for advertisers to increase monetization of that growing inventory. This is going to remain a priority and part of our road map for at least the next several years and likely years to come after that.

“But we’re making solid progress already. For example, we exceeded our ads revenue target in Q4, which was an exciting milestone to reach. We doubled our ads revenue last year, year over year, and expect to double it again, so that should give you a sense of the slope of monetization growth we’re on. There’s considerable work ahead of us, for sure, but we don’t see specific hurdles, other than doing the work.”

Expanding Beyond Content

Beyond content, Netflix continues to innovate with new forms of engagement, including gaming and interactive content. As the company shifts its reporting strategy in 2025, moving away from quarterly membership updates and focusing more on metrics like engagement and operating margin, its business model has clearly evolved. This change underscores Netflix’s confidence in its ability to continue growing revenue through diverse channels, with less emphasis on subscriber numbers alone.

Looking ahead, Netflix’s outlook for 2025 is optimistic as it forecast revenue growth of 12%-14% year over year, driven by sustained membership increases, an expanding ad business, and a continued investment in high-quality programming.

“We enter 2025 with strong momentum, coming off a year with record net additions (41 million) and having reaccelerated growth (16% increase in revenue),” according to the company’s shareholder letter.

“We’re in a leadership position in terms of engagement (approximately two hours per paid membership per day), revenue ($39 billion) and profit ($10 billion in operating income) in a market that is continuing to expand.

“We have to continue to improve all aspects of Netflix, more series and films our members love, a great product experience, increased sophistication in our plans and pricing strategy (including more advertising capabilities), and grow into new areas like live programming and games. If we do that well, we believe we’ll have an increasingly valuable company for consumers, creators and shareholders.”