Can one be 100% wrong in the media? Or even more than that?
Netflix just told us so.
The company rocketed past expectations -- from its guidance and from analysts -- when it comes to fourth-quarter subscriber growth: It pulled in an astounding 18.9 million new global subscribers, a near 10 million gain (9.7 million) over all analysts' projections. That is a 106% boost.
If you are executives of Walt Disney, Warner Bros. Discovery, Paramount Global, or Comcast, you are not only shaking your heads today, you may be shaken by the news from Netflix.
Pulling back for a wider view, some were expecting Netflix at best to add 20 million new subscribers for the entire 2024 year. Nope. It was 41 million!
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For sure, we can factor in that massive growth came from its much less expensive ad-supported/lower subscription service -- now two years old, which constituted 55% of its new subscribers.
While some casual observers may see a net loss in revenue in monthly consumer pricing -- $7.99/month for the ad-supported option "Standard With Ads" versus $17.99/month its "Standard" plan -- we know the potential for advertising revenue growth is massive.
It is difficult to imagine that even more subscriber growth could be coming, blowing past its massive 302 million global subscribers for all its products.
While the U.S. marketplace has healthy subscriber penetration levels -- at 80 million homes, versus around 120 million U.S. TV homes -- other markets have a ways to go.
One analyst says that in many countries, Netflix has only tapped in to 10% of those markets' TV-video homes.
Of course, this adds the Netflix story where some Monday morning quarterbacking continues to write the script of how legacy TV-network-based media companies blew it by underestimating what Netflix could do in the streaming/connected TV space.
And perhaps some business analysts as well -- especially recently.
Laurent Yoon, media analyst for Bernstein Research: “No puns. We thought it was a typo. Netflix defied the odds once again, delivering net adds far beyond even the most unreasonable (or so we thought) subscriber bogey we heard going into the print.”
Robert Fishman, media analyst for MoffettNathanson Research:
“At almost every turn we tried to apply the general laws of corporate physics as best as we understood them to a company that, at the end of the day, is still in the business of selling video entertainment.... [Netflix] demonstrated it is impervious to any notion of gravity.”
Financial analysts can only wonder what the gravitational pull will be in 2025.