Netflix (NFLX -0.63%) crushed Wall Street estimates in the fourth quarter, adding 13.1 million net new subscribers. This was the company's best fourth quarter ever. Revenue was up 12.5% year over year.

While investors continue driving up the price of this top streaming stock, which is up 55% in the last 12 months, it's best not to forget about some of management's strategic shifts in recent years. Let's take a closer look at Netflix's business today and follow up with an important takeaway for investors.

Changing course is the name of the game

Four years ago, co-founder and then-CEO Reed Hastings mentioned on the Q4 2019 earnings call that Netflix had no plans to sell ads on its platform. Today, it's wild how the tables have turned.

Netflix launched its lower-priced ad-based tier over a year ago, and so far, it's growing enormously. "We saw 70% quarter-over-quarter growth last quarter," said co-CEO Greg Peters on the Q4 2023 earnings call. "That's after 70% quarter over quarter for the quarter before and then 100% the quarter before that."

The hesitation with introducing ads stemmed from the fear that it would ruin the customer experience. But these days, these customers are showing with their dollars that they value having a cheaper option. Plus, it doesn't hurt that the leadership team views the global revenue opportunity from ads (excluding China and Russia) to be $180 billion.

For a long time, Netflix's management had a laid-back approach to accounts that shared their passwords. They probably viewed this strategy as a top-of-funnel marketing channel. I'm sure the thinking was that if people saw how compelling Netflix's content was, they'd want to sign up for their own membership.

But the business started cracking down on these freeloaders aggressively in the spring last year. Executives feel confident about this policy's ability to drive revenue gains and help Netflix better penetrate its addressable market over the long term.

Perhaps the biggest change of the three here is Netflix's recent partnership with TKO Group that would bring the WWE's live wrestling content and other shows to the streamer starting next year. This 10-year deal will cost Netflix $5 billion. The business plans to spend $17 billion in total on content this year, so the WWE partnership will represent a sizable 12% of this outlay in 2024.

This has to make one wonder what's next in store. "I would not look at this as a signal of any other change or any change to our sports strategy," said co-CEO Ted Sarandos on the latest call. But time will tell if major sports leagues are in Netflix's plans.

What investors need to understand

Netflix is still a pure-play streaming enterprise, and the changes I highlighted above demonstrate how the leadership team is trying to maintain the company's dominance in the industry. Investors should keep the following conclusion in mind.

Expect change to be constant, regardless of what management says. What we can learn from following Netflix's evolution is that executives will always be searching for ways to achieve growth and better serve customers, which appears to be their main objective here. That's not necessarily a bad thing.

And because change is the name of the game, I think it's totally unknowable how the streaming landscape will ultimately look at maturity, whenever that happens. Ten years from now, Netflix could be different than what we see today.

I suspect more strategic shifts will happen in the future. This just means that shareholders should always be open to things changing again, especially when it comes to internet-based businesses like Netflix. Consequently, the ability to adapt successfully should industry conditions require it is a key trait that quality companies possess.