When Netflix presented its results for the last quarter of 2023 on January 23, several financial analysis companies, such as Morgan Stanley and Bernstein, ruled: there was already a winner in the platform war.
In the last three months of the year, the company added 13 million new subscribers worldwide, its second best quarterly figure in history (only behind the figures it obtained in the middle of the pandemic).
In all of 2023, it added more than 29 million new subscribers.
The total figure is now 260.28 million.
Its revenue grew 12% year-on-year.
It is the streaming
company
with the lowest cancellation percentage ratio compared to its subscriptions, just 2% in the United States, well below its competitors, which stand at an average of 5.3%, according to data from the consulting firm. Antenna published in
Business Insider
.
Last year, the platform war entered a new phase.
After a 2022 in which these services saw the wolf's ears with the first drops in subscribers on Netflix, in 2023 Wall Street began to pay attention to whether the accounts of these services were healthy and were profitable businesses.
In this new situation, Netflix was crowned the great winner.
There are several factors that have led experts to declare it as such.
On the one hand, it is the platform that is setting the pace in internet television.
It was the first major
streaming
service to take its ad-supported subscription plan to the global level, which at the beginning of the year already had some 23 million monthly active users.
It is expected that the elimination of the basic plan without ads and the price increases in the other options will invite more and more customers to choose to pay less in exchange for watching a few minutes of advertising.
It is a business model that has ended up being imposed in
streaming
and almost all platforms already apply.
They were also the first to actively fight against shared accounts outside the home, an unpopular measure but one that has ended up bearing fruit.
Others, such as Disney+, have also followed suit on this point.
More information
The platforms raise their prices.
How much?
Because?
According to data from the consulting firm Nielsen, which measures television audiences in the United States, the time that Americans spend on Netflix is more than double that of its closest competitor: of the total time that Americans spent watching television in December 2023, 7.7% was on Netflix, compared to 3.3% for Prime Video or 1.9% for Disney+ (YouTube surpasses them with 8.5%).
The same goes for its competitors.
Content licenses
Beyond the numbers, there is another factor that shows the dominance of Netflix over other on-demand television services.
Series such as
Two Meters Under,
Blood Brothers
or, starting in April,
Sex in New York,
some of the titles that helped place HBO in the collective imagination as a reference brand in audiovisuals, can also be seen on Netflix.
The N company and Disney have also signed an agreement whereby 14 series from the second, such as
Lost, This Is Us
or
How I Met Your Mother
, can also be seen in the United States on Netflix.
And such a successful Paramount title as
Yellowstone
has traveled to some countries outside the United States thanks to Netflix (in Spain, SkyShowtime maintains its exclusive and will not be available on Netflix).
The agreements with Warner and Disney are not exclusivity, so their own digital services will maintain those titles.
The HBO series 'Blood Brothers' and 'The Pacific' are also available on Netflix.
Behind this phenomenon is a change in mentality regarding the exclusivity of content and that could be seen as a return to the beginnings.
Netflix became strong in the beginning thanks to licensed content.
The business benefited both Netflix, which was strengthened and consolidated thanks to titles produced and already broadcast by third parties, and the studios, which thus compensated for the drop in DVD sales and benefited from the new viewers who won their titles.
Over time, those companies realized that their content was feeding a monster that was on its way to eating them.
When they created their own video-on-demand services, they ended those licenses to enhance exclusivity.
When in 2017 Disney wanted to make it clear that its commitment to streaming
was
serious, it publicly broke with Netflix.
Bob Iger, CEO of Disney, even compared licensing content to “selling nuclear weapons to the enemy.”
In 2023, a new change in mentality came when companies like Warner Bros, Discovery or Disney saw that exclusivity had become a burden that did not allow them to profit from products that, on their own platforms, were no longer performing.
They are agreements in which, in principle, everyone wins: sellers can obtain an economic benefit that helps them fight against debts that, in some cases, do not stop growing, and buyers can be more efficient in spending and have more new content at a time, after the Hollywood strikes, when the slowdown has been evident.
According to data from What's On Netflix, a website focused on the platform's content, Netflix released about 130 fewer original programs in 2023 than in 2022, which means 16% less.
At Netflix they are aware of the good returns that this change of mentality in the industry brings them.
Ted Sarandos, one of the company's CEOs, took advantage of the latest results presentation to encourage companies to continue licensing content to them.
“We have a long history of helping launch some of television's biggest hits, including
Breaking Bad
and
The Walking Dead,
even more recently.
Schitt's Creek
.
“Because of our recommendation system and our reach, we can resurrect a series like
Suits
and turn it into a major pop culture milestone.”
“I love that studios are more open to licensing content again and I love telling them that we are open to negotiating,” he added.
'This is Us' is one of the titles included in the agreement between Disney and Netflix in the United States.
NBC (Ron Batzdorff/NBC)
Although these agreements are beneficial for both parties, some experts call on sellers to be cautious because they could once again be feeding a monster that, in a few months, will begin to make a lot of profit from other people's content if it manages to make its plan with ads take force.
Jason Bazinet, a financial analyst quoted in
Business Insider
in a report on this matter, sums it up this way: “Netflix makes money;
everyone else loses it.
“Netflix will not license its originals to anyone, but all the other Hollywood studios are licensing their content to Netflix.”
The possibilities of his rivals
Not everyone agrees that there is already a winner in the platform war.
And, if Netflix has won, the most complicated thing remains ahead: maintaining leadership.
Prime Video and Disney are the rivals best placed to do battle.
Experts such as Bloomberg
's Lucas Shaw
point to sports or children's programming as Netflix's weaknesses that its competitors can take advantage of.
Disney, with years of advantage in these aspects, is well placed in these areas, according to analysts, who also highlight the revolution that the incorporation of advertising to Prime Video in the United States and Canada has brought about in the internet television business. , United Kingdom and Germany (it will arrive in Spain throughout 2024): including by default advertising in all its subscribers and giving the option to pay 3 dollars more per month to not see ads.
Another outstanding Netflix account is in the broadcasting of live events.
Some of its next big bets are aimed in that direction.
On Saturday, February 24, Netflix premiered in the broadcast of a great awards gala, which was celebrated by the Hollywood Screen Actors Guild.
On March 3 they will broadcast a friendly between Rafael Nadal and Carlos Alcaraz.
And starting in 2025, Netflix will be the home of American wrestling's flagship show,
Raw
, which will mean 52 weeks of live programming in America and the United Kingdom.
Because, even though the streaming
war has been won
, there are still battles to fight.
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