Netflix earnings showcase strength as the rest of the media industry struggles

The main takeaway from Netflix's 2nd 4th net is concern is ... good.

That's right. A ample media and amusement company's cardinal concern is conscionable fine.

Netflix added 5.9 cardinal subscribers successful the quarter, a motion that its 2 superior 2023 initiatives — cracking down connected password sharing and launching a cheaper $6.99 per period advertizing tier — are bringing successful caller subscribers. Netflix added 1.2 cardinal subscribers successful the United States and Canada successful the 4th — its largest determination quarterly summation since 2021.

This is not the communicative for the remainder of the media industry. Disney and Warner Bros. Discovery person spent the twelvemonth slashing contented from its streaming services to debar paying residuals and redeeming connected licensing fees. Both companies person laid disconnected thousands of employees implicit the past 12 months to boost escaped currency flow. Paramount Global and Comcast's NBCUniversal some said 2023 volition beryllium the biggest yearly nonaccomplishment ever for their streaming businesses.

Meanwhile, Netflix boosted its escaped currency travel estimation to $5 cardinal for the year. Previously, the institution had estimated it would person $3.5 billion, but the actors and writers strikes volition chopped down connected contented spend. That means Netflix volition really person adjacent much currency than it antecedently expected.

Next quarter, Netflix forecast subscriber gains volition beryllium astir 6 cardinal again. The institution said gross volition accelerate successful the 2nd fractional of the twelvemonth arsenic it sees "the afloat benefits" of its password-sharing crackdown and dependable maturation successful its ad-supported plan.

Last year, Netflix's valuation dropped by 60% arsenic streaming subscriber maturation came to a halt. The institution spent ample clip connected net league calls focusing and explaining its caller video crippled business, introduced successful the middle of 2021, to assistance commencement a caller maturation narrative.

This quarter's shareholder missive hardly adjacent addresses video games.

Why? Because dissimilar the remainder of the media industry, Netflix doesn't request a caller narrative. The aged 1 inactive works. Streaming is growing. Cash piles are rising. Advertising has investors excited. Netflix has a dependable pipeline of planetary contented and a heavy room to upwind an extended writers and actors strike.

"The deficiency of references to video games successful its shareholder's missive suggests advertizing is the shiny entity that astir commands the company's focus," said Ross Benes, an expert astatine probe steadfast Insider Intelligence.

Netflix shares dropped 5% aft hours. That's much a grounds of nett taking aft Netflix's large gains this twelvemonth (up much than 62% arsenic of Wednesday's close) than thing to beryllium aggravated astir successful its archetypal quarterly numbers.

After a precipitous autumn past year, the institution is backmost connected track. And it didn't adjacent request to power trains.

Disclosure: Comcast's NBCUniversal is the genitor institution of CNBC.

– CNBC's Lillian Rizzo contributed to this article.