In 2024, Netflix saw a significant rise in subscriber numbers, largely driven by its investment in live sports events. The company added over 9 million subscribers in the holiday quarter of 2024, thanks to the success of the "Jake Paul vs. Mike Tyson" boxing match and the debut of National Football League (NFL) games on its platform. This growth marked a notable increase compared to previous quarters, showcasing the positive impact that live sports content had on Netflix’s subscriber base.
The Power of Live Sports Content
The Tyson-Paul boxing match in November 2024 drew over 60 million households globally, while NFL games on Christmas Day averaged 26.5 million viewers in the United States. Live sports have proven to be a key factor in Netflix’s strategy to attract younger audiences and advertisers. These events not only provide stability for Netflix’s advertising model but also make accounts "stickier," meaning subscribers are more likely to stay subscribed to the platform.
Growing the Ad-Supported Tier
A key benefit of adding sports content was its potential to boost Netflix’s ad-supported subscription tier. Advertisers typically pay a premium for ad placements during live events, making sports an important asset for Netflix. As the company continued to expand its ad-supported offering, live sports events became crucial for building this revenue stream. The ad tier is seen as a major growth driver for Netflix in the long term.
Big Hits Boosted Subscriber Numbers
Alongside sports, Netflix’s content lineup contributed significantly to its subscriber growth. The second season of "Squid Game" set a new record with 68 million views during its premiere week. Netflix added 9.2 million new subscribers in the fourth quarter of 2024, a big jump from the 5.1 million added in the third quarter. However, it was still lower than the 13.1 million subscribers gained in the same period of 2023.
A Shift in Focus
2024 marked the last time Netflix reported subscriber numbers, as the company shifted its focus to other performance metrics, such as revenue and profit. Analysts believe this shift is due to slower subscriber growth, leading to more scrutiny of Netflix’s advertising tier. The company’s ability to demonstrate success in advertising will be crucial to its future growth.
Plans for Price Increases and Content Strategy
Netflix was expected to raise the price of its standard tier, which costs $15.49 a month in the U.S., in the first half of 2025. This price increase could push more subscribers to the ad-supported tier, which generates higher revenue for the platform. Netflix also projected ad revenue of $528.9 million for the fourth quarter of 2024, contributing to the company’s financial growth.