Netflix adds 2.4 million subscribers globally; says ‘back to positivity’

American streaming platform Netflix added nearly 2.4 million global subscribers in the September quarter, far higher than its estimates of 1 million. However, it pales compared to the 4.4 million it had added in the year-ago quarter.

In the Asia-Pacific Region alone Netflix added 1.43 million new paying users.

Its revenue grew 19% (from $834 million to $889 million) in Q3, excluding foreign exchange, with average paid membership rising 23% (from 30.05 million to 36.23 million) year-on-year. Average revenue per member (ARM) was, however, was down 3%, partially driven by lower ARM in India, it said in a letter to shareholders. It clocked higher ARM in Australia and Korea.

“We’re done with shrinking quarters…we’re back to positivity. Everything the company is focussing on, whether on content, marketing, lowering prices for the ad supported model, paid sharing..lines us up for a good next year,” Reed Hastings, co-chief executive officer, Netflix said during the earnings call. The appreciating dollar is a significant headwind, and the company is expecting revenue of $7.8 billion in the next quarter. The sequential decline was entirely due to the continued strengthening of the US dollar against other currencies, Hastings said. “That’s not going to go away. But other than that, all the stars are lining up very well for us.”

To be sure, Netflix may even consider increasing its $17 billion annual budget. “Both the scope and scale, as well as the range and the cadence of hits is improving. I feel better about that $17 billion of content spending and we have to be better at getting more impact per $1 billion spending than anybody else. I think we’re spending at the right level. And as we reaccelerate revenue we’ll revisit that number, but we’re a pretty disciplined bunch,” co-chief executive officer and chief content officer Ted Sarandos said during the earnings call.

Last week, Netflix said it will roll out an ad-supported subscription plan on 1 November in Canada and Mexico, and on 3 November across Australia, Brazil, France, Germany, Italy, Japan, the UK, Korea and the US. In Spain, the plan will go live on 10 November. These 12 markets account for $140 billion of the brand’s ad spending across TV and streaming, or over 75% of the global market, Netflix said.

The plan is 20-40% lower than its current starting fees for these countries. “A key component of it (paid sharing) is the ability for borrowers, or people using somebody else’s account right now, to access Netflix by creating their separate account. Part of that is transforming their profile, viewing history and information that basically informs recommendations for them… through a separate account path (which) will be especially attractive in countries where we are launching lower-priced basic and ad plans,” said Greg Peters, chief operating officer, Netflix, adding the feature will roll out in early 2023.