Netflix added 2.4 million subscribers in the third quarter, marking a major turnaround for the streaming giant that has been plagued by declining growth over the past year.
The streamer now has just over 223 million subscribers and expects to add another 4.5 million in the fourth quarter. In the US and Canada, Netflix saw modest gains of 100,000 subscribers, while the Asia-Pacific region contributed 1.4 million paid subscribers. Latin America brought in 310,000 subscribers, while the EMEA region brought in 570,000 of Netflix’s quarterly subscribers.
Total revenue in the third quarter was $7.92 billion, a slight decrease from the second quarter but up 5.9 percent year-over-year.
Tuesday’s earnings represent the first time this year Netflix has added subscribers. Netflix lost 970,000 subscribers in the second quarter and 200,000 subscribers in the first quarter — losses that brought the company’s stock price down and caused staff morale to take a major hit in the face of layoffs and a slump in growth. operating expenses.
The subscriber losses have also forced the company to turn its attention to advertising for the first time. While Netflix previously said it would debut its ad-supported tier in early 2023, the streamer has been quick to follow that timeline and plans to launch an ad-supported subscription tier on November 3 for $6.99 a month — about a month before. Disney+ will launch its own ad-supported tier for $7.99 per month on December 8.
To that end, Netflix signed a deal with Microsoft to power its ad technology, hired Snap Chief Business Officer Jeremi Gorman and VP Sales Peter Naylor to lead the initiative, and signed an agreement with Nielsen in the US and the nonprofit BARB in the UK. to measure viewership for its advertising partners.
Other monetization efforts include the streamer’s increasing crackdown on account sharing, the latest update of which included a new feature that rolled out on October 17 that allows users to transfer their profiles to a new membership account. In a letter to shareholders linked to Netflix’s earnings report, the company said it had “devised a thoughtful approach to monetizing account sharing,” allowing both the profile transfers and primary account holders to add “sub-accounts” if they wish. that want to pay family and friends. Early next year, those changes will be rolled out more broadly, the letter said.
And as Netflix shifts its focus to revenue, the company said it will stop offering guidance to paying subscribers from January next year, when Netflix reports its fourth-quarter revenue. The company will still share guidelines for revenue, operating income, operating margin, net income, earnings per share and fully diluted outstanding shares.
As for Netflix’s games expansion, Netflix now has 35 games available to play, including titles based on The Queen’s Gambit, nailed! and money robberyas well as a Netflix edition of Ox free. Netflix said it has 55 more games in development and has previously said it will have more than 50 games available to play by the end of the year.
As Netflix kicks off the third quarter of Hollywood’s earnings season, Wall Street’s focus will be on whether streaming platforms can continue to make subscriber gains amid an economic slowdown and executive signaling that content spending will be more disciplined. Netflix stock has fallen about 60 percent since the first day of trading this year.