TOPLINE
Netflix gained 2.4 million new paid subscribers in the third quarter of this year, the company said in an earnings report Tuesday, a reversal for the streamer after reporting losses for the first time in 10 years over the last two consecutive quarters.
KEY FACTS
Netflix reported 223.09 million subscribers, up from the 220.67 million it reported in July and 213.56 million in the third quarter of last year.
The streaming service beat its own forecast of 221.67 subscribers.
Netflix predicted it will continue to grow its subscriber base and add 4.5 million paid users by the end of the fourth quarter.
The company generated $1.4 billion in net income in the third quarter, down nearly 4% from a year ago, and revenue grew 5.9% to $7.9 billion, both of which beat the company’s forecasts.
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Much of the growth came from the Asia-Pacific region, where 1.4 million paid memberships were added in the third quarter.
Netflix’s share price jumped more than 12% in after-hours trading Tuesday and stood at $275.40 as of 8 p.m., after closing at $240.86.
WHAT TO WATCH FOR
In November, Netflix plans to launch a cheaper ad-supported tier, the first time ads will be coming to the streaming service. Amid tight competition for viewers attention, Disney+ is also launching an ad-supported tier in December. When HBO Max and Discovery+ combine into one streaming service next year, a free ad-supported tier will be offered.
KEY BACKGROUND
In April, Netflix reported its first subscriber loss in a decade, losing 200,000 subscribers. The company blamed the suspension of its service in Russia amid the country’s conflict with Ukraine, as well as competition with other streaming services and the “large number of households” that share accounts with each other. It suffered another loss of 970,000 subscribers in July. Netflix has since said it is exploring ways to monetize people who share one account and crack down on password-sharing, and launched a “profile transfer” feature this week that allows a user to move their data between accounts. Roughly 450 Netflix staffers were laid off this year. Netflix credited its third-quarter subscriber boost to programming, including the release of the fourth season of Stranger Things and Monster: The Jeffrey Dahmer Story.
TANGENT
In the third quarter, Netflix produced 1,024 episodes of original TV content, according to a report published last week by research firm MoffettNathanson. That’s a record for the company, and five times that of any other streaming service, the report said. Nearly 160 original shows were launched on the platform during that time period.
FURTHER READING
Netflix’s Cheaper Ad-Supported Tier Launching November 3 (Forbes)
Netflix Produced A Record 1,024 Original Television Episodes This Quarter (Forbes)
By Marisa Dellatto, Forbes Staff
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