Form is temporary, class is permanent, as they say in sports – but maybe in the entertainment industry they should say so too.
After losing 1.2 million subscribers in consecutive quarters of decline in 2022, Netflix has seemingly rebounded from Earnings report for the third quarter (opens in a new tab) this bodes well for his fortunes in 2023 and beyond.
Between July and September this year, Netflix added a whopping 2.4 million subscribers to its paying customer pool – a figure that pushes global subscribers to a new high of 223 million. The record form of the fourth season of Stranger Things, coupled with the similarly triumphant success of Monster: The Jeffrey Dahmer Story over the same three-month period helped Netflix reach a milestone.
Purple Hearts, The Gray Man, and Extraordinary Attorney Woo also played a key role in helping the streamer recover from losses, and all said Netflix says revenue, operating income, and membership exceeded its own forecast in the third quarter of 2022. add 1 million new subscribers between July and September.
After a difficult first half [of the year], we believe we are on a path to accelerate growth again, “Netflix said in a statement accompanying the results. “The key is to keep members happy. That’s why we’ve always focused on winning the competition for everyday viewing. When our series and movies get our members excited, they tell their friends about it, and then more people watch, join and stay with us.
Netflix has suffered in recent months from the increased spending of competing streamers such as Prime Video, Disney Plus and HBO Max, while cost of living crises in many regions have forced consumers to cut their monthly entertainment spending.
But Netflix bosses know where they stand in the ever-evolving streaming industry. “Our competitors invest a lot to increase subscriber base and engagement, but building a large, successful streaming business is difficult,” said Netflix in its latest earnings report. “We estimate everyone is losing money, and total operating losses in 2022 are well over $ 10 billion compared to Netflix’s annual operating profit of $ 5 billion to $ 6 billion.”
It seems that operating profit will only increase in the coming year. Not only is Netflix exacerbating its account sharing repression to boost revenue, the streamer is also gearing up to launch a cheaper, ad-backed subscription tier to ease the pain of subscriber wallet and its own bottom line.
Netflix has confirmed that this cheaper Netflix plan – expected to cost $ 6.99 / £ 4.99 / $ 6.99 per month – will be launched in the US, UK and Australia on November 3, offering customers a cheaper way to watch Netflix at the expense of seeing four to five minutes of advertising per hour.
Will it prove successful? Time will tell, but the surprisingly high interest in a similar subscription tier on HBO Max is promising.
In any case, Netflix seems to have stabilized its ship – at least for now. Sure, mega-blockbusters like Stranger Things and Monster: The Jeffrey Dahmer Story don’t come every month, but at least the company has returned to such financial stability that has enabled it to produce bold new movies and TV shows on a regular basis. I hope so anyway.