‘Stranger Things’ pays off for besieged Netflix
Netflix has stemmed the bleeding.
The streaming juggernaut overcame its rare moment of weakness from last quarter to add 6.8 million new customers, with 520,000 in the United States in the three months that ended in September.
The rebound, after a loss of 126,000 customers domestically earlier in the year, helped Netflix recover some investor confidence as it faces a coming onslaught of new streaming competitors.
The thirdquarter results were slightly lower than the company’s forecast. Netflix had been expected to add about 7 million new customers, with 800,000 in the U.S.
The stock jumped more than 8 percent in afterhours trading Wednesday. The company’s market value had seen a steep drop since its July earnings announcement, with shares having traded down more than 20 percent.
The company also reported a profit of $665 million on $5.2 billion in revenue.
Netflix forecast a healthy rate of growth for the rest of the year. The company said it expected to add 7.6 million total new customers in the next quarter, with about 600,000 for the United States.
That was below the 9.4 million total subscribers that Wall Street had expected and is an indication of the pending competition.
The thirdquarter results benefited from Netflix’s bestknown series, “Stranger Things,” which debuted its hugely anticipated third season over the Fourth of July weekend. The series drew 64 million viewers in the first four weeks it was available, the company reported.
Netflix, which started as a DVDbymail service, has become a dominant force in Hollywood, and its disruptive growth has reordered the television landscape. It often outspends its rivals and has forced the industry’s biggest players to embrace streaming as they abandon, albeit slowly, the paytelevision model.
Netflix is the nation’s largest digital television network, with more than 158 million customers around the world, including 60 million in the United States.
That audience has become critically important as wellfinanced competitors wait in the wings.
On Nov. 1, the tech behemoth Apple plans to unveil its streaming product, Apple TV Plus; 11 days later, the Walt Disney Co. intends to launch Disney Plus, which will feature Marvel’s biggest franchises, the complete “Star Wars” library and the Disney content vault.
In a cheeky marketing stunt, Disney controlled Twitter for a few hours on Monday when it promoted its service on an epic Twitter thread with a seemingly endless string of titles (both famous and obscure) that will appear on Plus.
Not to be outdone, Jennifer Aniston, who stars in Apple’s new signature series “The Morning Show,” drew Instagram’s attention Tuesday when she finally joined the social platform.
Both streamers will come stocked with original films and series, and both will cost about half the price of Netflix.
By early next year, Netflix will face another competitor: AT&T’s HBO Max.
The competition suggests the more important consideration in its financial report is Netflix’s expectation for the current quarter, which also traditionally is its most lucrative period with the most new subscribers.
But Netflix plans a new line of attack at the end of the year.
It will release more than half a dozen highprofile features over the coming months, including Michael Bay’s “6 Underground,” Eddie Murphy’s “Dolemite Is My Name” and perhaps its most ambitious screen effort to date, Martin Scorsese’s “The Irishman,” which cost $159 million.