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Wednesday, February 21, 2024

Netflix’s Share Rises by 14% As It Reverses Its Subscriber Slump

Globally, Netflix added 2.4 million new customers from July through September

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Sadaf Hasan
Sadaf Hasan
Aspiring reporter covering trending topics

UNITED STATES: Netflix is all set to introduce a new streaming option with advertising by reversing user losses that have harmed its stock this year and anticipating that a new ad-supported streaming option will help attract 4.5 million customers by year-end.

In after-hours trading, shares of Netflix increased by almost 14%, giving the company a boost in getting new customers.

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Before the announcement of the company’s quarterly profits, its stock, a favorite of investors during those years of tremendous growth, had dropped by roughly 60% this year.

Reed Hastings, co-CEO, stated, “Thank God we’re done with shrinking quarters. The company has to continue building momentum by focusing on content, marketing, and a more affordable advertising plan.”

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Globally, Netflix added 2.4 million new customers from July through September, more than double what Wall Street expected.

The last episodes of the sci-fi sensation “Stranger Things” were released during the quarter, along with the serial killer series “Dahmer-Monster: The Jeffrey Dahmer Story,” which grew to be one of Netflix’s most-watched series ever.

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The world’s largest streaming service is striving to restart membership growth following a sharp dip in the first half of the year when the company’s subscriber base dropped by 1.2 million amid a shaky global economy and increased competition for online video watchers. There are currently 223.1 million Netflix subscribers worldwide.

In the United States, where the market has matured, most established services have stopped expanding. Live sports content is helping newer competitors gain market share, like Paramount Global’s Paramount+.

In its quarterly letter to shareholders, Netflix said that competing media companies are losing money on streaming to draw viewers.

The letter stated that “creating a large, successful streaming business is hard,” adding that “our competitors are investing substantially to generate subscriptions and engagement.”

In contrast to Netflix’s yearly operational profit of $5 to $6 billion, competitors were predicted by Netflix to have combined operating losses of “well over $10 billion” by the end of 2022.

Competitors like Walt Disney Co. operate numerous businesses, including TV networks and theme parks, to make up for streaming revenue losses.

With sales of $7.9 billion for the third quarter, up 6% from the same period last year, Netflix outperformed Wall Street expectations. The per-share profit was $3.10.

The company’s prediction of 4.5 million client pickups by the end of 2022 came in a little bit above Wall Street projections, which had typically been 4.2 million.

Netflix expects revenue of $7.8 billion for the fourth quarter, a sequential dip it has attributed to the strong US dollar.

The firm said it was committed to developing original material and publishing all episodes at once to enable binge-watching, even as it made different tweaks to spur growth.

The firm stated, “We feel the capacity for our customers to immerse themselves in a tale from start to finish boosts their enjoyment but also increases their probability of telling their friends, which eventually means more people watching, joining, and remaining with Netflix.”

Additionally, during the final three months of the year, a new season of the British royal drama “The Crown” and the sequel to the 2019 film “Knives Out” will be published.

Also Read: Blonde: Ana de Armas’ Much-awaited Film Gearing up to Release on Netflix This Week


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