Netflix Posts Q3 Subs Gains

Netflix returned to global subscriber growth in the third quarter, adding 2.41 million members to reach 223.09 million customers, a 4.5 percent year-on-year growth rate.

For Q4, the platform is projecting it will add 4.5 million customers to reach 227.6 million members.

Revenues for the period were up almost 6 percent to $7.9 billion, with a net income of $1.4 billion.

“Our competitors are investing heavily to drive subscribers and engagement, but building a large, successful streaming business is hard,” the streamer said in its shareholder letter. “We estimate they are all losing money, with combined 2022 operating losses well over $10 billion, vs. Netflix’s $5 to $6 billion annual operating profit.”

The platform notes that it has higher engagement than any other streamer, “with room for growth: In the U.K., Netflix accounts for 8.2 percent of video viewing, 2.3 times Amazon and 2.7 times Disney+; in the U.S, Netflix accounts for 7.6 percent of TV time, 2.6 times Amazon and 1.4 times Disney+,  Hulu and Hulu Live.”

The letter to shareholders adds: After a challenging first half, we believe we’re on a path to reaccelerate growth. The key is pleasing members. It’s why we’ve always focused on winning the competition for viewing every day. When our series and movies excite our members, they tell their friends, and then more people watch, join and stay with us.”

Netflix’s ad-supported subscription plan arrives November 1 in Canada and Mexico; November 3 in Australia, Brazil, France, Germany, Italy, Japan, Korea, the U.K., and the U.S.; and November 10 in Spain. “Cumulatively, these 12 markets account for $140 billion of brand advertising spend across TV and streaming, or over 75 percent of the global market.”

“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 U.S. and Canada delivered revenues of $3.6 billion from 73.4 million customers, a small gain on the previous quarter. EMEA revenues hit $2.4 billion with a subscriber base of 73.5 million. LatAm delivered a small subs gain to 40 million, with revenues of $1 billion. AsiaPac delivered the biggest subs gain, of 1.4 million to reach 36 million, with revenues of $889 million.