According to Netflix, it gained 13 million customers in the last quarter. In total, the streaming market leader is now watched in 260.3 million households worldwide. Now Netflix is trying its hand at classic television and could become real competition.
The weekly wrestling show “Raw” from the WWE league is moving to the streaming service Netflix after 30 years on linear TV. The financial details of the deal were not disclosed – but according to information from the financial service Bloomberg, Netflix will cost the WWE programs five billion dollars over a period of ten years.
The deal makes it clear how much the balance in the TV business has shifted in favor of streaming. The US broadcasting group NBC is missing out on a reliable magnet for viewers and advertising – while sport is the most important reason for Americans to still afford an expensive cable TV subscription.
Risky bet paid off
The wrestling league hopes to eventually become more popular outside the United States through Netflix’s global base. At Netflix, co-chief executive Ted Sarandos expects advertising dollars to follow WWE broadcasts onto his platform.
Netflix made a risky bet last year, but it seems to be paying off. In around 100 million households, Netflix was watched without a subscription – with the access data of friends or relatives.
When the service asked such free riders to pay, it could have backfired: After all, there are plenty of other streaming services that you can switch to. But the Netflix program proved attractive enough that many people paid instead.
Streaming without advertising is becoming more expensive
This crackdown means that the streaming giant is constantly gaining new customers. The new, cheaper subscription with advertising also plays a big role: in the twelve markets in which it is available, 40 percent of new customers choose it. Netflix is removing the slightly more expensive basic subscription without ads in more and more countries. If you want to watch ad-free, you have to pay significantly more.
For the current quarter, Netflix assumes that the growth in the number of users will slow down. At the same time, potential hits such as the second season of the Korean series “Squid Game” are coming out this year, which could provide a new boost.
Better than the competition
Quarterly sales rose by 12.5 percent year-on-year to a good 8.83 billion US dollars, as Netflix announced after the US stock market closed on Tuesday. Profit was $938 million – after $55 million in the same quarter last year. Investors were impressed: the shares rose by more than eight percent in after-hours trading.
For the whole of last year, a profit of 5.4 billion dollars remained in Netflix’s coffers. This is a stark contrast to the business of many other streaming services, which are often in the red. For some competitors like Apple and Amazon, their actual core business generates so much money that they can easily accept streaming losses.
But Disney, Paramount and NBC as Hollywood studios and TV networks have made streaming a cornerstone of their business strategy – while cinema and traditional television are sometimes running bumpily.