What just happened? 

Netflix’s fourth-quarter 2024 results beat all expectations with 19m new subscribers signing up in the quarter – the single largest quarterly subscriber additions in the company’s history. Bolstered by a strong content slate across the holiday season – which included live sporting events such as the Jake Paul vs. Mike Tyson boxing match, NFL Christmas Day games, and the long-awaited release of Squid Game Season 2 – Netflix bested even the pandemic-fuelled 15m additions of Q1 2020.  

The 19m new subscribers were distributed evenly geographically, with between 4-5m net additions in each of North America, Europe, Asia Pacific and Middle East and Africa. Collectively, this saw Netflix exceed 300m total subscribers for the first time, with its global base now sitting at 302.5m subscribers.  

How much of this can be attributed to live sports? 

The evidence suggests that this growth in subscribers was considerably aided by live sporting events. Data from Ampere’s Subscription Video Economics products shows that November’s Paul/Tyson boxing match drove around 1.5m US sign-ups to the streaming service (based on sign-ups from the 15^th and 16^th of November), the single largest daily spike in US sign-ups since Ampere tracking began in 2018. The fight also resonated in other markets, with the UK seeing an additional 80k sign-ups over the same period. This suggests that globally the impact of the event could have resulted in closer to between 2m-3m signups. 

Large-scale, heavily marketed one-off events are an effective mechanism for adding new subscribers. Peacock also saw a significant spike to its subscribers last year when it aired the NFL wildcard match between the Miami Dolphins and the Kansas City Chiefs. However, given the typical costs required to purchase these events, what really drives their long-term value is the ability to retain new customers after the event. The early signs for Netflix in this regard are strong. Our data shows that of the 1.5m users that signed up to watch the Paul/Tyson event, 80% of them still remain as customers a month after.  

What has made this strategy so effective? 

Netflix’s ability to successfully retain these customers comes down to two factors: content and cost. Firstly, outside of live-streamed events, Netflix filled Q4 with hit shows for customers across its global footprint. In its earnings call, Netflix highlighted its international success with shows such as Senna from Brazil, The Empress from Germany, Black Doves from the UK, and Squid Game from South Korea. This was reflected in the evenness of subscriber net additions across North America, Latin America, EMEA and APAC (each region added close to 5m subscribers across the quarter) – indicating the streamer managed to make content that appealed globally and regionally. Secondly, Netflix’s cheaper ad-supported tier, which is available in Netflix largest markets, lowers the barrier to entry for consumers hoping to be a part of the action. Ampere data shows that almost half of sign-ups to the Paul vs. Tyson fight did so through Netflix’s ad-tier. Netflix has seen strong uptake of this tier since its launch in 2022, reflected in its announcement that in Q4 the majority of sign-ups (55%) in ad markets did so on the ad tier. 

These two factors place Netflix in a uniquely strong position to capitalise off arguably the two most ambitious live-streamed events the company had attempted: the financial barrier to sign-up to watch one of Netflix’s high-profile events was lower, and once they were in, the strong catalogue meant that they stuck around.  

What comes next? 

The natural expectation would be that as these live events have brought success, more global live events can be expected. There is some merit to this – these events can reactivate lapsed subscribers, and bring in a new cohort (particularly older sports fans) that have not subscribed to Netflix previously. But there are pitfalls too – first, because the success Netflix achieves through retaining subscribers via live events inherently lowers the number of new subscribers for further events to target, meaning that too many successful, expensive live events would be self-defeating. And secondly, because as a global business live cannot mean live for every territory in the world – although it was striking to hear Netflix's CEO Ted Sarandos describe on the earnings call how its live events to-date have also had post live – essentially catch-up viewing – impact.  

So aside from a small number of high-profile, global, live events, Netflix has two logical avenues to explore. The first is to consider targeted, one-off live events that have a particular territory or regional appeal, and can help subscriber acquisition for audience segments that it may be less penetrated in ,such as the recent deal for the FIFA Women’s World Cup rights in the US only, or, alternatively, Netflix can support churn reduction by looking to events that have wider international appeal, but are not wedded to a purely live outcome for the viewing experience. WWE is a perfect example of a high-frequency event that is consumed all year round and often non-live. The UFC (whose rights are up for renewal in 2025) also potential fits this bill, as do other live non-sporting events, such as major music concerts. 

Netflix is constantly keen to point out that, despite its substantial subscriber and revenue gains, it has thus far made only small dents in global entertainment spend and viewing time. As a result, despite just having its best quarterly result, there may still be much more headroom available.