Netflix’s fortunes are improving this quarter. The streamer increased its subscriber base by 2.41 million, bringing the total to 223.09 million. Netflix anticipated a net gain of 1 million Netflix subscribers in the third quarter, so today’s results far exceeded both its own and analysts’ expectations. In the third quarter of 2022, the company earned $7.93 billion in revenue, compared to the $7.85 billion predicted by analysts.
Netflix subscriber cost
This will be Netflix’s first increase in a long time, particularly in its subscriber base in the United States and Canada. The company reported an increase of 104,000 subscribers in the region, bringing the total to 73.4 million. The last time Netflix experienced subscriber growth in the United States and Canada was in the fourth quarter of 2021.
In Q4 2022, the company anticipates 4.5 million paid net adds.
Netflix had two very bad quarters in recent months, losing 1.2 million global subscribers. A significant number of layoffs have also occurred, most recently in its animation department. However, with the addition of its new ad-supported tier, which will be available on the platform in November, the company may have opened itself up to new customers looking for a less expensive way to stream.
“Advertisers’ reactions have been extremely positive thus far, and we believe that more choice, particularly for more price-conscious consumers, will translate into meaningful incremental revenue and operating profit over time.” That said, it’s still early days, and because we’re keeping our existing plans ad-free, it’ll take some time for us to build up our membership base and the associated ad revenue,” Netflix added.
Netflix revealed last week that the Basic with Ads plan would cost $6.99 per month and include four to five minutes of TV show and movie advertisements per hour. The ad-supported tier of rival Disney+, which will cost $7.99 per month, will launch one month before.
Investors learned today how the company plans to monetize password sharing on the platform. Netflix announced that beginning in early 2023, account members who want to create subaccounts for account borrowers will be charged a fee. Chile, Costa Rica, and Peru were the first countries to test the “extra members” feature.
Netflix launched a profile transfer feature yesterday to assist account members in transitioning to separate accounts without losing personalized recommendations, viewing history, or other custom settings.
In addition, the company announced that the one-year anniversary of its gaming launch is quickly approaching. Despite recent reports that less than 1% of its subscriber base plays its games, Netflix continues to invest in mobile gaming. Netflix announced last month the addition of game handles for subscribers who want to play its exclusive games. In addition, the streamer is launching an internal games studio in Finland.
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Netflix is also opening a new studio in California and expanding into cloud gaming, according to recent reports.
Netflix is still focused on content, investing in big-budget films like the highly anticipated “Knives Out” sequel, “Glass Onion: A Knives Out Mystery,” which will have a limited theatrical release before its December 23 streaming release.
Netflix only won three Primetime Emmys this year, but its controversial drama series “Monster,” about Jeffrey Dahmer, has received 824.2 million viewing hours. The company boasted that the series, along with “Stranger Things” season 4, is among the most watched for this quarter.
