Things are looking up for Netflix this quarter. The streamer added 2.41 million subscribers, bringing the total to 223.09 million. Netflix expected a net gain of 1 million subs in the third quarter, so today’s results far exceed its own expectations and analysts’ expectations. The company reported earning $7.93 billion in revenue in Q3 2022, whereas analysts predicted $7.85 billion.
This will be Netflix’s first increase in a while, particularly in its U.S. and Canada subscriber base. The company reported a spike in 104,000 subscribers in the region, making the new total 73.4 million. The last time Netflix experienced subscriber growth in the U.S. and Canada was in Q4 2021.
The company expects 4.5 million paid net adds in Q4 2022.
Netflix experienced two very grim quarters in recent months, losing a total of 1.2 million global subscribers. A significant number of layoffs have also occurred, including the more recent downsizing of its animation department. However, with the addition of its new ad-supported tier coming to the platform in November, the company has potentially opened itself up to new customers looking for a cheaper way to stream.
“The reaction from advertisers so far has been extremely positive, and we believe that more choice, especially for more price-conscious consumers, will translate into meaningful incremental revenue and operating profit over time. That said, it’s still very early days, and since we’re keeping our existing plans ad-free, it will take us time to build up our membership base and the associated ad revenue,” the company wrote in its letter to shareholders.
Netflix revealed last week that the Basic with Ads plan would cost $6.99 per month and include four to five minutes of advertisements an hour for TV shows and movies. The launch will occur one month before rival Disney+’s ad-supported tier, which will cost $7.99 per month.
Today, investors also learned how the company intends to reduce password sharing on the platform. Netflix said that, starting in early 2023, it will give account members the ability to create subaccounts for account borrowers. This “extra members” feature was first tested in Chile, Costa Rica and Peru.
Netflix launched a profile transfer feature yesterday to help account members transition to their own accounts without losing personalized recommendations, viewing history and other custom settings.
Also, the company noted that the one-year anniversary of its gaming launch is approaching. Netflix continues to invest in mobile gaming, despite the recent report that less than 1% of its subscriber base plays its games. Last month, Netflix announced the addition of game handles for subscribers looking to play its exclusive games. Also, the streamer is establishing an internal games studio in Finland.
Netflix continues to remain focused on content, investing in big-budget films such as the anticipated “Knives Out” sequel, “Glass Onion: A Knives Out Mystery,” which will have a limited debut in theaters during Thanksgiving weekend before its streaming release on December 23.
Netflix only managed to nab three Primetime Emmys this year, however, its controversial drama series on Jeffrey Dahmer, “Monster,” has a total of 824.2 million viewing hours. The company boasted that the series is among the most watched for this quarter.
More to come…
Netflix adds 2.41M subscribers, soaring past expectations by Lauren Forristal originally published on TechCrunch