SAN FRANCISCO (AP) – Netflix reversed its recent subscriber losses with a summertime gain that management is hoping to build upon with the upcoming launch of a cheaper version of the video streaming service that will include ads for the first time.
The Los Gatos, California company disclosed on Tuesday that it picked up 2.4 million subscribers during the July-September period, a comeback from a loss of 1.2 million customers during the first half of the year amid stiffer competition and soaring inflation that’s squeezing household budgets.
Netflix now boasts 223 million subscribers, enabling the company to at least temporarily reclaim the mantle as the world’s largest video streaming service. Walt Disney Co eclipsed Netflix in August when it reported its service had 221 million subscribers, a number that will be updated on November 8 when Disney is scheduled to report its summertime results.
“Thank goodness, we are done with shrinking quarters,” Netflix co-CEO Reed Hastings exclaimed in a video conference call on Tuesday. “We are back to positivity.”
The uptick in subscribers also helped Netflix earn USD1.4 billion, or USD3.10 per share, a four per cent dip from the same time last year. Revenue climbed six per cent from last year to USD7.93 billion. The subscriber gains, earnings per share and revenue all topped analyst projections compiled by FactSet.
Netflix’s shares surged by about 14 per cent after the latest numbers came out. Even so, the stock has still lost more than half its value so far this year, reflecting worries that Netflix’s best days have passed.
Now that Netflix is growing again, it will be aiming to accelerate the momentum with its first ad-supported plan that debuts in the United States (US) and 11 other markets in early November. The new option will cost USD7 per month in the US, less than half the price for Netflix’s most popular USD15.50-per-month plan without commercial interruptions.
“Netflix still has a lot of room to grow and capture the share in a price-sensitive market,” Investing.com analyst Haris Anwar said in a sign of renewed optimism about the company’s prospects.