Netflix announced Tuesday that it surpassed 2.4 million subscribers in the third quarter, mostly from outside the United States. This has led to a spate of customer losses this year, sparking fears among investors and questions about how much the streaming business can grow.
The streaming giant said it now has 223 million subscribers worldwide after beating its previous forecast of adding about 1 million in the quarter. lost 200,000 subscribers in 2015 and about 1 million in the second quarter.
“After a difficult first half, we believe we are on track to re-accelerate growth,” Netflix said in its quarterly letter to shareholders.
Netflix is preparing to introduce advertising to the service on November 3rd. This is part of a bid to attract more customers with lower-cost subscriptions. With an ad-supported plan at $6.99 per month in the US, every hour a subscriber watches her content, he earns 4-5. Advertisements are displayed for a minute.
Netflix had revenue of approximately $7.9 billion in the third quarter, up nearly 6% from the year-ago quarter. The company’s profit was about $1.4 billion, down 3% from the year-ago quarter.
The Race to Dominate Streaming TV
Netflix shares rose more than 10% in after-hours trading.
In a letter to shareholders, Netflix said it expects to add 4.5 million subscribers in the fourth quarter. Netflix also said it will stop providing guidance to investors on projected subscriber numbers starting next quarter.
Lightshed Partners analyst Rich Greenfield said the results show Netflix will thrive as its competitors continue to lag behind.
Mr Greenfield said:
The decision to introduce an advertising option to Netflix was a major turning point for the company, which for years has emphasized an ad-free experience as a selling point for its customers. But this year, after announcing a decline in subscribers on the company’s first-quarter earnings call, co-CEO Reed Hastings reversed course, allowing customers to choose their experience with ad-powered plans. said it would be
Streaming has become an increasingly competitive industry in recent years. Disney, for example, reported in August that it has about 221 million subscriptions across its suite of services. In December he will launch a low-cost ad tier for Disney+.
Netflix is breaking convention in a different way this fall. The company has signed its first deal with the largest theater chain in the United States. Starting November 23, he will release “Glass Onion: A Knives Out Mystery” in 600 theaters nationwide for a week, ahead of its first-ever streaming debut. It’s a schedule. straight away. Written and directed by Rian Johnson, the film is expected to be the sequel to his 2019 hit, which featured Daniel Craig as Delphic detective Benoît Blanc.
Netflix told employees this year that it also plans to crack down on password sharing, which allows users to watch content without paying a subscription fee. Research firm MoffettNathanson estimates that 16% of Netflix users share passwords, more than any other major U.S. streaming service. is shared with an additional 100 million households.
The company is also trying to cut costs. In May, Netflix laid off about 150 employees across the company, or about 2% of its total workforce, primarily in the United States. In a statement, Netflix said the cuts were driven by slowing revenue growth for the company.
Despite the changes, Netflix has yet to reverse a sharp drop in its share price. of which has fallen more than 60% in the last year.
During the third quarter, Netflix released a variety of movies and TV shows. Among them is Gray Man, a big-budget action movie starring Ryan Gosling and Chris Evans and directed by Avengers: Infinity brothers Joe Russo and Anthony Russo. war. ” Other popular titles include the serial killer show Monsters: The Jeffrey Dahmer Story. Romantic drama “Purple Hearts”. Stranger Things released the second half of Season 4 near the end of last quarter.