Topline
Netflix said in its earnings report on Tuesday that it added 2.4 million new paying subscribers in the third quarter of this year, reversing the situation after the company reported a loss. It was the first time in 10 years in the past two consecutive quarters.
Netflix logo displayed at the company’s Los Angeles headquarters in 2021 October 7th.
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Key Facts
Netflix reports 223.09 million subscribers, high 220.67 million reported in July and 213.56 million in the third quarter of last year.
The streaming service surpassed its own forecast of 221.67 subscribers.
Netflix expects it will continue to expand its subscriber base and add 4.5 million paying subscribers by the end of the fourth quarter user.
The company’s third-quarter net income was $1.4 billion, down nearly 4% year over year, with revenue up 5.9% to $7.9 billion, both exceeding company expectations.
Most of the growth came from Asia Pacific, which added 1.4 million paid members in the third quarter.
Shares of Netflix rose more than 12% in after-hours trading on Tuesday and were at $240.86 as of 8 p.m. at $275.40.
Notes
November, Netflix plans to debut cheaper Ad-supported tier ads are coming to the streaming service. Disney+ also launched an ad-supported tier in December amid fierce competition for viewers’ attention. There will be a free ad-supported tier next year when HBO Max and Discovery+ merge into one streaming service.
Key Background
In April, Netflix reported its first subscriber churn in a decade, losing 200,000 subscribers. The company blamed the suspension of its service in Russia on the country’s conflict with Ukraine, as well as competition with other streaming services and a “large number of families” sharing accounts with each other. It lost another 970,000 subscribers in July. Netflix has since said it’s exploring ways to monetize who shares an account and crack down on password sharing, and this week rolled out a “profile transfer” feature that allows users to move their data between accounts. About 450 Netflix employees have been fired this year. Netflix attributes its third-quarter subscriber growth to programming, including fourth season Stranger Things and Monster: Jeffrey Dahmer’s story.
Tangent
In the third quarter, Netflix produced 1,024 episodes of original TV content, according to a report released last week by research firm MoffettNathanson. That’s a record for the company and five times more than any other streaming service, the report said. During this period, nearly 160 original shows were launched on the platform.
Further reading
Netflix’s cheaper ad-supported tier launches Nov. 3 (Forbes)
Netflix produced a record 1,024 original TV episodes this quarter (Forbes)
