The fresh titles helped attract users to a new lower-priced “Basic with Ads” subscription, as consumers cut back on their entertainment spending amid soaring inflation and an uncertain economy.
Revenue in October to December period, at $7.85 billion, was in line with estimates.
Netflix insists that counting new users is no longer the most important criteria for assessing the company’s health and that revenue should instead be the main metric.
“What may be getting lost in the mix is that some number of new subscribers — we don’t know how many — likely came in on Netflix’s ad-supported tier,” said Insider Intelligence principal analyst Paul Verna.
“That means, most likely, lower average revenue per subscriber, which is a measure Wall Street will be paying more attention to as Netflix’s ad businesses scales up,” he said.
Netflix goals this year include “nudging” viewers who use passwords shared by subscribers to pay their own way.
“We have high confidence in our ability to accelerate revenue throughout the course of the year as we scale ads and we launch paid sharing (of accounts),” said Netflix chief financial officer Spencer Neumann.
Netflix faces strong competition from deep-pocketed rivals, including Disney+, which has also introduced an ad-based subscription.
But despite the challenges, Netflix is one of the rare tech giants to have garnered confidence from Wall Street with its share price up almost 50 percent in the past six months.
Other tech giants and Disney have been hammered on the markets as firms lay off employees and cut costs after a massive hiring and spending spree at the height of the coronavirus pandemic.
