• by Wayne Friedman , January 24, 2024

Boosted by estimates of overdelivery on global subscriber gains, Netflix is looking at even better news with T-Mobile's upcoming changes to its internet/mobile bundles -- shifting to include Netflix's year-old ad-supported option as a free from a no-ad option.

Under its “Netflix On Us” promotion, T-Mobile has been giving T-Mobile subscribers free Netflix ‘Standard’ with no ads  through T-Mobile bundled plans such as Magenta Plus/MAX or Go5G Plus/Next. 

Starting Jan. 24, all those customers will now be switched over to the “Standard With Ads” plan.

T-Mobile did not disclose how many of its customers have been getting the free Netflix Standard option. 

Netflix recently announced there are now 23 million U.S. advertising-option monthly active users (MAUs)-- up from 15 million in the third quarter of 2023.

When asked during its fourth-quarter earnings phone call with analysts whether it was reasonable to assume its ad-option subscribers/MAUs base would roughly double as result of this change, co-Chief Operating Officer Greg Peters only said: “I won't get into the specifics of a particular deal or provide a forecast for a particular deal.”

He added: “[A] lower consumer-facing price means that we have room now to bundle the ads plan into a set of lower-priced partner offerings where it was hard to make the economics work for everyone previously.”

In terms of general advertising issues with its “Standard With Ads” product, Peters said there much work to do in a number of areas: 

“We've got tons to do on improved measurement. We want to launch more ads products. We've got binge ad sponsorships now. And we have to increasingly build the capability to be better partners with advertisers and serve their needs.”

Commenting on its blockbuster $5 billion deal for WWE content that Netflix announced earlier in the day, co-Chief Executive Officer Ted Sarandos said:  

“WWE Raw is sports entertainment, which is right in the sweet spot of our sports business, which is the drama of sport. Think of this as 52 weeks of live programming every week, every year. It feeds our desire to expand our live event programming. But most importantly, fans love it.”

Sarandos told analysts they should think of the WWE deal as a push into more live event programming  but also similar to its other storytelling sports “shoulder programming.” 

Netflix programs documentary-style sports shows around Formula One racing, professional golf, professional road cycling and other sports through shows including “Drive To Survive,” “Full Swing,” “Breakpoint," “Quarterbacks” and “Tour de France.”“Live event programming is something we've talked about for quite a while, and this has been in the works," he said, adding that it "fits inside of our $17 billion programming spend now.”

Earlier in the day, Netflix surprised investors by sharply overdelivering on new global subscribers in the fourth quarter of 2023 -- adding 13.1 million subscribers.

Netflix had promised around 8.8 million additions. It now has 260.3 million global subscribers.

In the U.S. and Canada, Netflix added 2.8 million subscribers, to total 80.1 million.

Fourth-quarter revenue for Netflix grew 13% to $8.8 billion over the year-ago period, with operating income 17% higher to $1.5 billion. 

On Tuesday, after-market trading of Netflix stock -- when its earnings results were released -- grew 9% to $534.80.