Netflix adds more than 2m paying subscribers

Shares climb in New York as streaming service bucks cost of living crisis and industry-wide slowdown

Netflix has halted an exodus of subscribers from its video streaming service, bucking the cost of living crisis to post a return to growth by adding 2.4 million paying customers. The video streaming company increased paid subscribers to 223.1 million in the three months ending in September, up from 220.7 million. Revenues grew 6 per cent year-onyear to $7.9billion. The return to growth comes on the back of six months of stagnation for Netflix.

NETFLIX has added subscribers for the first quarter in three to halt the streaming decline triggered by the cost of living crisis.

Paid subscribers using the service rose to by 2.4m to 223.1m in the third quarter of 2022. Revenues grew 6pc year-on-year to $7.9bn (£7bn).

Shares rose 15pc in after-hours trading in New York as investors cheered the unexpectedly strong results.

The return to growth followed six months of stagnation at Netflix, which has been battling to cling on to viewers amid fierce competition and price pressure from rising inflation.

The company hit out at its rivals, telling investors it believed its biggest competitors are burning $10bn a year combined on their streaming efforts, while it is turning a profit.

The growth put Netflix ahead of market expectations, and the company expects to add a further 4.5m subscribers over the Christmas period.

Shows including supernatural drama Stranger Things, which returned for its fourth season, and Monster: The Jeffrey Dahmer Story, helped boost Netflix’s subscriber base over the past three months. The next season of The Crown, which focuses on the Royal family, is due in November.

Netflix said: “After a challenging first half, we believe we are on a path to reaccelerate growth. The key is pleasing members. It’s why we’ve always focused on winning the competition for viewing every day. When our series and movies excite our members, they tell their friends, and then more people watch, join and stay with us.”

The results come after Netflix laid out plans to boost its customer base through a cheaper version of its streaming service. Last week, it announced that it would introduce advertising to its streaming app with a new cut-price tier. Netflix’s “Basics with Adverts” offering will cost £4.99 in the UK and feature a reduced line-up of shows. It expects to launch the service in November.

Netflix customers on the Basic tier will be required to watch four to five minutes of adverts every hour, lasting for 15 to 30 seconds each. The company hopes its advertising-supported tier will help return it to subscriber growth.

It is also cracking down on password and account sharing, making it harder for customers to log-in to their Netflix account on multiple televisions and devices. However, the effort risks driving away some customers who have enjoyed sharing its app with family members.

The US streaming company reported its first ever drop in subscriber numbers earlier this year, when it revealed it had lost 200,000 paying customers in April and a further 1m in July as consumers tighten their belts.

Netflix has repeatedly raised its prices amid surging inflation. Its standard UK tier, with full HD shows, now costs £10.99 per month. Analysts at Kantar found that 1m British households had shut down at least one streaming account so far this year.

However, Britain remains one of Netflix’s more lucrative markets.

UK subscribers earned Netflix £1.4bn last year, it revealed in its accounts for the first time this month. The company was also added to the Broadcasters Audience Research Board’s monthly viewing figures, which claimed it secured an 8.2pc share of streaming views in September.

Netflix’s share price has declined by almost two thirds this year as rivals gain market share and video streaming companies are squeezed by inflation.

It has been struggling with customer defections to competitors as its price rises pile pressure on to already tightening consumer budgets.

Netflix’s rival Disney+ has grown to more than 152m subscribers this year, adding 14.4m customers in its last quarter. Hulu and ESPN+, both owned by Disney, had 46.2m and 22.8m subscribers respectively.

‘After a challenging first half, we believe we are on a path to growth. The key is pleasing members’