Netflix Beats Guidance, Adds 2.4 Million Subs Globally, Including 100,000 in North America

Netflix is back on the subscriber growth bandwagon. And beating its chest.

The subscription streaming VOD behemoth Oct. 18 said it added 2.4 million net subscribers in the third quarter (ended Sept. 30), including 100,000 subs in North America. The streamer had expected to add only 1 million subs globally. It lost 1.3 million North American subs in the previous second quarter.

Netflix ended the quarter with more than 223 million subs worldwide.

“After a challenging first half, we believe we’re on a path to reaccelerate growth,” co-CEOs Reed Hastings, Ted Sarandos and CFO Spencer Neumann wrote in the shareholder letter.

Indeed, after successive fiscal quarters of relative doom and gloom (for Netflix anyway), executives took the opportunity to gloat. The quarter featured some of the streamer’s biggest ratings hits, including limited series, “Dahmer — Monster: The Jeffrey Dahmer Story,” “Stranger Things” season four, South Korean hit “Extraordinary Attorney Woo,” Ryan Gossling actioner The Gray Man, and military romance Purple Hearts.

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Netflix said it has higher viewer engagement than any other streamer with room for growth. The streamer said it accounts for 8.2% of all TV time in the U.K., which it said is 2.3 times bigger than Amazon Prime Video and 2.7 times greater than Disney+.

In the U.S., Netflix accounts for 7.6% of all TV time, which it said is 2.6 times greater than Prime Video and 1.4 times greater than the combined Disney, Hulu and Hulu + Live TV.

More importantly, Netflix says all of its competitors are losing big money trying to catch up.

“Building a large, successful streaming business is hard — we estimate they are all losing money, with combined 2022 operating losses well over $10 billion versus [our] $5 to $6 billion annual operating profit,” wrote the executives.

Netflix is projecting net subscriber growth of 4.5 million in the current fourth quarter, ending Dec. 31. That compares with 8.3 million net adds in the previous-year period. The streamer contends that the usual seasonality and strong content slate will drive sub growth. The Nov. 3 launch of the pending ad-supported subscription tier is not expected to have a material impact on Q4 earnings.

“Our aim is to give our prospective new members more choice — not switch members off their current plans,” Hastings & Co. wrote. “Members who don’t want to change will remain on their current plan, without ads, at the current price.”

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