Netflix did much better than expected in the third quarter thanks to hit series like “Stranger Things” and “Dahmer: Monster.” In the quarter to the end of September, the streaming giant booked around 2.4 million new paid subscriptions, as announced on Tuesday after the US stock market closed. Netflix thus achieved user growth of 4.5 percent year-on-year and clearly exceeded both its own forecast of one million new customers and that of the financial market. The stock initially responded after the trading session with a jump in price of more than ten percent.
At the end of the quarter, Netflix had a total of over 223 million user accounts worldwide. The company expects to add another 4.5 million customers by the turn of the year. Netflix has thus initially stopped the negative trend of the first six months of 2022, when the number of users fell for two quarters in a row. After the significant decline in subscription numbers in the first half of the year, investors feared that the pioneer of streaming services would continue to lose paying customers.
In order to hold its own in the face of fierce competition, Netflix also spends a lot of money
Despite the surprisingly positive number of new customers, the streaming provider, which is under strong competitive pressure from rivals such as Disney+, Hulu and HBO, is not yet able to match the growth of the past – in the final quarter of 2021, for example, Netflix had booked 8.3 million new users. In order to assert itself in the fierce competition of video services, Netflix is also spending a lot of money. Net profit fell in the most recent quarter compared to the same period last year by around 3.5 percent to 1.40 billion dollars (about 1.42 billion euros). In the current quarter, the company even only expects earnings of 163 million dollars.
At least the investments seem to be paying off. Not only the number of users and the business outlook surprised positively, Netflix also exceeded market expectations in terms of sales with growth of six percent to 7.9 billion dollars.
Netflix announced last week that it would be offering an ad-supported service in Germany and eleven other countries from November. The streaming giant had long resisted such a tariff. However, in view of the increasing competition in the market and rising inflation, the US company decided in April to offer a cheaper tariff, which, in contrast to the existing offers, should contain advertising. The company hopes that this will bring in new customers.