Streaming giant Netflix beats Q3 expectations and adds 2.4 million subscribers, while confirming global password crackdown next year
Netflix has pleased investors after posting a positive set of quarterly results, and revealing that it has managed to stem the worrying loss of subscribers.
At the same time the streaming giant confirmed it will finally begin its long touted crack down on password sharing in 2023.
Netflix’s third quarter results are welcome news after a fairly torrid 2022 for the streaming giant. In January Netflix revealed it had grown its global customer base to a total of 222 million subscribers during 2021, after it benefited from people being stuck at home during the pandemic.
However the economic consequences of the pandemic and the global lockdowns began to become apparent n 2022.
In April this year Netflix revealed for the first time in ten years, it had experienced a big fall in subscribers (200,000 people had left the platform) during its first quarter. It also said it would cut hundreds of jobs.
Amid that grim outlook, Netflix had a change of heart about adverts and said it would look at an advert-supported cheaper subscription plan, which has now been confirmed earlier this week.
It came after Netflix in July had selected Microsoft as its global advertising technology and sales partner. That development with Microsoft was interesting considering that Netflix runs its streaming service on AWS.
Netflix at the same time had also warned shareholders that another two million subscribers were likely to leave in the three months to July.
But in the end only 970,000 subscribers left the service in the three months to July.
Now Netflix has posted mostly positive third quarter results for the three months ending 30 September.
For the third quarter Netflix posted a net profit of $1.39bn, down from $1.44bn a year earlier.
Revenues came in $7.9bn, up from $7.48bn in the same year-ago quarter.
Netflix shares skyrocketed more than 14 percent on Tuesday after the company beat Wall Street expectations.
“After a challenging first half, we believe we’re on a path to reaccelerate growth,” said Netflix. “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 also reported the addition of 2.41 million net global subscribers, more than doubling the additions the company had projected a quarter ago.
Password crack down
And in addition, Netflix will begin to crack down on password sharing next year.
In March last year Netflix had warned it was testing account passwords, as it sought to clampdown on the revenue losing problem of password sharing.
Then in March 2022, Netflix began testing new tools to crackdown on password sharing between people who don’t live in the same household.
Now Netflix has reportedly said it will allow people who have been borrowing accounts to create their own.
The company will also allow people sharing their accounts to create sub-accounts to pay for friends or family to use theirs.