Netflix has managed to pick itself back up, as it gains 2.4 million subscribers in the third financial quarter and predicts it will have a strong fourth quarter.
As reported by Variety, following two quarters of losses, Netflix has seen some growth in Q3. The streaming company has also informed investors that it expects Q4 to be a strong one, rounding off the fiscal year, though did mention that it doesn’t expect any immediate large gains from the upcoming launch of its ad tier.
Q3 saw Netflix gain around 2.41 million net new paid subscribers, bringing the total number worldwide to roughly 223.1 million as of the end of September. Over the past year, the company has seen a number of losses, having reported a loss of 200,000 subscribers in April, and a further loss of nearly one million subscribers even with the arrival of Stranger Things season 4.
According to Variety, Netflix is predicting to bring in 4.5 million new streaming customers in Q4, contrasted against the 8.3 million in the same quarter the previous year. However, Netflix didn’t specify how many of these subscribers it expects to join through the new ad tier plan. “While we’re very optimistic about our new advertising business, we don’t expect a material contribution in Q4’22 as we’re launching our Basic With Ads plan intra-quarter and anticipate growing our membership in that plan gradually over time,” Netflix told shareholders in its Q3 letter.
This ad-supported plan is set to launch November 3, costing $7/month. Aside from having to sit through four to five minutes of ads per hour, video quality will also be limited to 720p, and some shows and movies will be unavailable due to “licensing restrictions,” though a list of which titles that will include hasn’t been provided as of yet.
Netflix also plans to crackdown on password sharing early next year, meaning that if you share an account with someone but don’t live in the same household, one of you will have to pay an extra fee.
The losses Netflix faced earlier this year are the first it experienced in more than a decade, potentially due to things like more competition, rising inflation hitting consumers hard, and the simple fact that Netflix may have just hit critical mass, as there are only so many people willing to pay for streaming.
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