Netflix UK profits soar by almost 75% to $60m, according to financial reports
Baby Reindeer was key to Netflix’s recent success
Profits at Netflix UK soared by three-quarters last year to a post-tax figure of £46.5m (US$60.82m) as a password sharing crackdown, a subscription price hike and the success of content such as Baby Reindeer boosted engagement and revenues.
The figure was up 74% from 2022’s £26.7m post-tax operating figure, according to the streamer’s latest financial accounts. Pre-tax numbers also climbed 70% from £31.6m to £53.7m.
According to newly filed accounts with UK business registrar Companies House, the platform posted an 8% revenue increase in 2023, reaching £1.7bn, up from £1.5bn in 2022.
The overwhelming majority of that money derives from streaming revenue (£1.6bn in 2023), with a comparatively small share of £35m coming from services rendered to parent company Netflix UK and its Netherlands-based sister company Netflix International B.V.
Netflix said that revenue was boosted by a 7% growth in subscriber numbers. The streamer issued a dividend of £35m in 2023, down from £50m the year prior.
The positive financial results will help offset a significantly more severe tax bill of £14.2m, far bigger than 2022 when it increased only marginally.
Overall, however, Netflix will be pleased that its UK division is prospering amidst contraction in the TV industry. According to the financial reports, the sharp climb in revenues is “due to a large member base … and increase in revenue per paying membership.”
Last October Netflix hiked subscription prices by £1 a month for UK members, with the basic plan costing £6.99 a month. The premium tier rose by £2 to £17.99. Netflix has also cracked down on UK subs who share their accounts with partners, friends and family. Warning emails were sent out last year which offered subs the opportunity to add another account for £4.99 a month.
The crackdown was subsequently hailed as a success, with Netflix adding more than 13m global subscriptions in the final three months of 2023. Netflix doesn’t issue subs number for the UK, but according to BARB’s most recent Establishment Survey data, the SVoD is in 17.1m UK homes.
Meanwhile, UK series came up trumps in Netflix’s latest What We Watched engagement report, with three of the streamer’s top four shows emanating from the country in the first six months of the year.
Harlan Coban thriller Fool Me Once took the top spot, with 107.5 million views, followed by season three of US historical drama Bridgerton (91.9 million), Richard Gadd’s dark comedy Baby Reindeer at number three (87.6 million) and Guy Ritchie’s The Gentlemen (75.9 million) in fourth spot.
That strong showing is further evidence that British dramas are having a moment on Netflix. Last month, Ted Sarandos appeared at the Royal Television Society London Convention, where he told delegates that Netflix had spent $6bn since 2020 on producing content such as Bridgerton, One Day and the upcoming Thursday Murder Club. Of Netflix’s relationship with the UK, he said that “filming here is always a privilege and never a sacrifice.”
Baby Reindeer won four Emmy awards in September, including best limited or anthology series, plus acting honours for creator Richard Gadd and co-star Lily Gladstone.
