Form is temporary, class is permanent, as they say in sport – but perhaps they should say that in the entertainment industry as well.
After losing 1.2 million combined subscribers during consecutive quarters of decline in 2022, Netflix has apparently bounced back with a Third quarter earnings report (opens in new tab) which bodes well for your fortunes in 2023 and beyond.
Between July and September of this year, Netflix added 2.4 million subscribers to its pool of paying customers – a number that brings its global subscriber count to a new record of 223 million. The record-breaking form of Season 4 of Stranger Things, coupled with the equally triumphant success of Monster: The Jeffrey Dahmer Story over the same three-month period, helped Netflix reach the milestone.
Purple Hearts, The Gray Man and Extraordinary Attorney Woo were also crucial in helping the streamer recoup his losses, and in all, Netflix says that revenue, operating income and membership exceeded its own forecasts in Q3 2022. company executives expected to add 1 million new subscribers between July and September.
“After a challenging first half [of the year], we believe we are on track to re-accelerate growth,” Netflix said in a statement accompanying the results. “The key is to please the members. That’s why we always focus on winning the competition to watch 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 has suffered from rising spending from rival streamers such as Prime Video, Disney Plus and HBO Max in recent months, while cost-of-living crises in many regions have forced consumers to limit their monthly spending on entertainment content.
But Netflix bosses know where they stand in an ever-expanding streaming industry. “Our competitors are investing heavily to attract subscribers and engagement, but building a large, successful streaming business is difficult,” Netflix said in its latest earnings report. “We estimate that they are all losing money, with combined operating losses in 2022 well above $10 billion against Netflix’s $5 to $6 billion annual operating income.”
This operating profit also appears to increase in the coming year. Not only is Netflix ramping up its crackdown on account sharing in a bid to boost revenue, but the streamer is also preparing to roll out a cheaper, ad-supported subscription tier to ease the pain on subscribers’ wallets and their own. results.
Netflix has confirmed that this cheapest Netflix plan – set to cost $6.99 / £4.99 / AU$6.99 per month – will launch in the US, UK and Australia on November 3, offering customers a more affordable way to watch Netflix at the expense of watching four to five minutes of ads an hour.
Will it be a success? Only time will tell, but the surprisingly wide acceptance of a similar subscription level on HBO Max is promising.
Either way, Netflix seems to have stabilized its ship – at least for now. Of course, mega-hits like Stranger Things and Monster: The Jeffrey Dahmer Story don’t come out every month, and the company would be wise to avoid complacency, but at least Netflix has returned to the kind of financial stability that saw it capable of producing new ones. daring movies and TV shows regularly.