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Netflix gains more than 13 million subscribers in the fourth quarter
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Netflix announced a major boost in sign-ups in the fourth quarter on Tuesday. The company added more than 13 million subscribers for the quarter, compared to Wall Street’s expectation of 8.7 million.
 
While Netflix added 1.2 million paid subscribers in the fourth quarter in the US, much of the strongest subscriber growth came internationally from Europe and Asia.
 
Overall, Netflix now has a record number of subscribers at 260.3 million.
 
And investors seem to be cheering: Netflix’s stock jumped more than 7% in after-hours trading Tuesday.
 
Password sharing and Netflix’s foray into ads
In the past year, the company implemented several initiatives aimed at adding subscribers, including a password-sharing crackdown that pushed password “borrowers” into creating their own subscriptions and introducing an advertising-supported subscription tier for $6.99.
 
The plan is significantly cheaper than Netflix’s ad-free offerings, at $6.99 per month in the US. In October, Netflix said it raised the price of its premium ad-free plan to $22.99 while its one-stream basic plan rose to $11.99.
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Earlier this month, Amy Reinhard, Netflix’s president of advertising, said Netflix’s ad tier hit more than 23 million monthly memberships.
 
On Tuesday, Netflix sounded a positive note on its growing advertising business.
 
On the company’s fourth-quarter earnings call, Netflix co-CEO Greg Peters said he had high hopes for Netflix’s ability to snatch ad dollars from traditional TV competitors.
 
“We know ad dollars follow engagement. We’ve got the most engaged audience so we believe we’re well positioned to capture some of that ad spend that shifts from linear to streaming,” he said.
 
In Tuesday letter to shareholders, Netflix declared its password-sharing crackdown a success, as well.