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Netflix Reports Strong Q1 2024 Subscriber Growth

MEDIANetflix Reports Strong Q1 2024 Subscriber Growth

Netflix significantly increased its subscriber base by 16% over the quarter. The company substantially exceeded high market expectations, confirming that the 90% rise in stock prices was no fluke. Due to the pressure for high profits, Netflix’s prices in Poland may increase this year. Previously, the company raised prices in the USA, the UK, and France.

Netflix released its financial results for the first quarter of 2024 yesterday. The company made a significant impact by expanding its subscriber base by 16% over the quarter, adding 9.33 million new subscribers to reach a total of 269.6 million. This is the highest user growth since 2020, the start of the coronavirus pandemic. Importantly, the company far surpassed analysts’ expectations, who had anticipated a subscriber base increase of 4.8 million.

Thus, Netflix confirmed its leading position on the global streaming map and justified the high valuation of its stock, which has risen more than 30% since the beginning of this year and nearly 90% over the past year. Clearly, the previously controversial policy of combating password sharing is working and increasing the company’s profits. This is also a result of price increases; in October, subscription prices rose in the USA, the UK, and France. Of course, the broad, attractive programming lineup also plays a vital role. This includes global hits such as the series “The Three-Body Problem” and strong local productions like the Polish series “1670”.

In some markets (e.g., the USA), the company introduced a cheaper ad-supported subscription, which proved to be a spectacular success. It effectively reaches consumers who are more cost-conscious, allowing some to save money and additionally purchase other streaming services. The competition in the streaming market remains very high—both in the USA and in Poland.

The high profit growth will enable the company to further expand through greater funds that can be allocated for film and series production. In some markets, the company is also entering the live sports broadcasting market. Netflix still has a huge target market, taking subscribers not only from other streaming services but primarily from traditional television.

However, it is important to note the company’s lower revenue forecast for the second quarter of this year. This indicates that subscriber growth will slow down. The company announced that from 2025 it will stop reporting quarterly changes in subscriber numbers. This will disappoint many investors, as subscriber count changes are seen by most as a fundamental metric each quarter, especially during periods of high market expectations.

The high pressure for good results in upcoming quarters may mean price increases for Netflix’s Polish customers. The company last changed prices in Poland (price increases for higher plans and a price reduction for the basic plan) in August 2021. Currently, the company offers three plans in Poland priced at 29 PLN, 43 PLN, and 60 PLN per month. A price change could be associated with the introduction of a cheap ad-supported plan in Poland. This plan could even be cheaper than the current basic plan, as in the USA, the ad-supported option costs only $6.99, equivalent to 28.50 PLN.

Netflix Subscription Prices in the USA and Poland

Basic (720p) Standard (1080p) Premium (4K)
Poland 29 PLN 43 PLN 60 PLN
USA $6.99 (with ads)
28.50 PLN
$15.49
63.10 PLN
$22.99
93.70 PLN

Source: Netflix

Paweł Majtkowski, eToro analyst in Poland

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