Netflix is growing again and Hollywood can breathe a sigh of relief.
The streaming leader added 2.41 million customers in the third quarter, exceeding internal forecasts as well as expectations on Wall Street. Netflix grew in all regions of the world and said on Tuesday it expects to sign up another 4.5 million users globally this period.
While Netflix is not growing as it was a couple years ago, the world’s most popular streaming network is back on a positive trajectory after erasing customer losses in the first half of the year.
That is good news for investors, who suffered steep stock-market losses when the company reported slowing growth earlier in the year.
“After a challenging first half, we believe we’re on a path to reaccelerate growth,” the company said in a letter to shareholders.
'Stranger Things' in projection across the world — in pictures
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Landmarks around the world were lit up with a special projection to promote the return of the hit Netflix show 'Stranger Things'. All photos: Netflix -
A projection on Elephant Rock in AlUla, Saudi Arabia. -
Gateway of India in Mumbai, India. -
Stockholm, Sweden. -
Wawel Royal Castle in Krakow, Poland. -
Cologne in Germany. -
Empire State Building in New York City, US. -
Madrid in Spain. -
Guggenheim Museum Bilbao in Pais Vasco, Spain. -
Barranquilla in Colombia. -
Kuala Lumpur Tower in Malaysia. -
Duomo Square in Milan, Italy. -
Fans at the unveiling of the projection on the Empire State Building. EPA -
Season four of 'Stranger Things' has been split into two parts, with the second being released on July 1, 2022. EPA
Shares of Netflix rose as much as 12 per cent to $268.88 in extended trading after the results were out. The stock was down 60 per cent this year through the close on Tuesday in New York.
A strong series of fresh programmes attracted millions of new viewers in the third quarter. The period started with new episodes of Stranger Things, one of the most popular TV series in the world.
Netflix also released the Korean smash hit Extraordinary Attorney Woo, the movies The Gray Man and Purple Hearts, and the true crime drama Monster: The Jeffrey Dahmer Story, its second most popular English-language original series.
Revenue for the quarter grew 5.9 per cent to $7.93 billion, beating analysts’ projections.
Profit of $3.10 a share also topped estimates and the number of paying customers increased to 223.1 million.
However, it will not be all rosy going forward: Netflix is still on pace for its slowest growth in years. The company lost 1.2 million customers during the first half of the year — a decline that led investors and peers to reconsider their streaming investments.
The company estimates sales of $7.78bn this quarter, below the $7.98bn forecast by analysts. Earnings are expected to come in at 36 cents a share, a fraction of the $1.20 estimated on Wall Street.
Nonetheless, co-chief executives Reed Hastings and Ted Sarandos argue the company has plenty of room to grow.
The service accounts for about 8 per cent of TV viewing in the US and UK, two of its largest markets, and is adding market share every year, the company said in its letter. Netflix is also profitable, unlike the streaming services operated by most of its rivals.
Management plans to increase sales by introducing an advertising-supported version of the streaming service in November and charging for password sharing next year. Customers willing to watch Netflix with five minutes of advertising per hour can pay $7 a month, less than half of the cost of the most popular plan.
While investors have long judged Netflix based on the number of customers it adds every quarter, the company is trying to get them to consider more traditional financial measurements such as revenue and operating income. As a result, the company said it will no longer provide subscriber forecasts.
'Our Great National Parks' Netflix documentary — in pictures
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Barack Obama narrates 'Our Great National Parks', which is on Netflix from April 13. All photos: Netflix -
'Our Great National Parks' is an endlessly fascinating and gorgeous exploration of some of the most beautiful and inspiring places on Earth. -
Spanning five continents, it tells the story of the creatures that roam through the world's top national parks. -
Kenya’s Tsavo National Park and Indonesia’s Gunung Leuser National Park feature in the documentary. -
It also explores the waters of Monterey Bay, California, and the eclectic terrain of Chilean Patagonia, to name only a few. -
Obama wants viewers to gaze in wonder and appreciate the innate beauty that these wild spaces have to offer. -
The footage in the documentary is stunning. -
Obama’s narration never comes close to reaching the heights of Sir David Attenborough’s dulcet tones, however. -
In the fifth episode, it focuses on Gunung Leuser, and provides an all-encompassing view of the park’s ecosystem. -
This includes intimate looks at tigers, forest elephants, orangutans and Sumatran rhinos, which are the smallest of the species. -
Obama clearly has a vested interest and emotional connection to the preservation of national parks.
