Netflix profits soar

With profits having risen to £1.85bn in the first quarter of 2024, Netflix is flying high.

But what is behind this large jump in profit?

According to Netflix’s own analysis, the addition of 9.3 million subscribers has played a huge part in driving up profits following the company’s announcement that it was cracking down on password sharing. The new member figures are  1.75 million more than in Quarter 1 in 2023. 

However, starting from 2025, the firm has announced it will stop sharing subscriber numbers with the world. Instead, it will turn its focus to engagement.

The change comes as Netflix feels engagement is the single best indicator of customer satisfaction with their offering, with this thus being the leading indicator for retention and acquisition over time.

Netflix measures engagement by assessing the hours viewed per account, with Q1 in 2024 suggesting this figure was steady compared to the same quarter last year. They are aiming to increase this figure across the board however, through innovating in product and marketing.

The company will be placing an increasing focus on the ‘remind me’ function that alerts users when a show is released, helping to turn interest into action. It will also continue to focus on the ‘personalised recommendations’ portion of their platform, which the company feels is the most effective method of finding audiences than traditional techniques. This method led to the success of programmes such as Squid Game and Griselda.

Netflix is also investing heavily in live events, including the upcoming live boxing match between Mike Tyson and Jake Paul, which it is promoting as the must-watch event of the summer.