Netflix is looking to rake in more money from its streaming business this year, projecting a 4 percent revenue growth for the first quarter (Q1) of 2023.
This is notwithstanding the stiff competition the streaming giant now faces from the likes of YouTube, TikTok, and gaming platforms, aside from its direct streaming competitors.
The number of entertainment choices available to consumers today has grown, making the market more competitive.
But Netflix says it is capable of weathering the storm as it competes from the position of strength in a market big enough to meet its revenue targets.
“Beyond our direct streaming competitors, we also vie for consumers’ time against linear TV, YouTube, short-form entertainment like TikTok, and gaming, to name just a few,” Netflix said in a letter to its shareholders on the back of its Q4 2022 financial results.
“The silver lining is that the market for entertainment is huge and Netflix is still very small by comparison,” it said.
The streaming giant admitted it’s not easy to build a large and profitable streaming business but added that it is “competing from a position of strength, as we lead the industry in terms of engagement, revenue, and streaming profit”.
“As a pure-play streaming company, we’re also not anchored to shrinking legacy business models, like traditional entertainment firms, allowing us to lean hard into the big growth opportunity ahead of us,” it said.
Netflix is also hoping to shore up its revenue this year with a broader rollout of ‘paid sharing’ later this quarter. Announced by the company late last year, paid sharing ensures that users sharing their passwords are made to pay more, though not in all countries.
The company said today’s widespread account sharing (100M+ households) undermines its long-term ability to invest in and improve Netflix as well as build its business.
“So we’ve worked hard to build additional new features that improve the Netflix experience, including the ability for members to review which devices are using their account and to transfer a profile to a new account,” Netflix said.
The company said as it rolls out paid sharing, it would give members in many countries the option to pay extra if they want to share Netflix with people they don’t live with.
“As is the case today, all members will be able to watch while travelling, whether on a TV or mobile device,” it said.