Movies

Netflix adds 5 million subscribers and beats Wall Street’s profit expectations

BBG News

As a film enthusiast with decades of experiencing the evolution of streaming platforms, I must say that Netflix’s Q3 performance is nothing short of impressive. With 5 million new subscribers and a total of 282 million global members, they are undoubtedly leading the pack.

In simple terms, it can be said that the streaming service provider, Netflix, demonstrated that it still has room to grow by adding 5 million new users during its third quarter, bringing its total number of global members up to 282 million.

In the third quarter ending on September 30, the firm based in Los Gatos, California announced revenues amounting to approximately $9.8 billion – a 15% rise from the corresponding period last year. Their net earnings were roughly $2.4 billion.

According to FactSet, the firm announced earnings of $5.40 per share, exceeding the forecasted $5.12 by analysts. Originally, analysts predicted a revenue of around $9.77 billion.

Netflix’s third-quarter success was boosted significantly by its original productions, such as the fourth installment of “Emily in Paris,” starring Lily Collins, and the true-crime drama “Monsters: The Lyle and Erik Menendez Story.

As a movie reviewer, I’m thrilled to share some exciting news! The company is venturing into the prosperous realm of live sports this year. In November, get ready for the highly anticipated boxing match between YouTuber Jake Paul and the legendary Mike Tyson. But that’s not all! On Christmas Day, two NFL games are lined up, which analysts on Wall Street will be keeping a keen eye on as potential gauges of the company’s advertising prowess. It’s an action-packed lineup you won’t want to miss!

Following the turbulent era of media upheaval, Netflix finds itself at the forefront with a dominant role that was scarcely anticipated nearly a decade ago, as stated by Morgan Stanley’s equity analysts Benjamin Swinburne and Thomas Yeh in their note to clients prior to Netflix’s earnings announcement.

The company’s revenue and share of TV time suggests “a long runway of potential growth,” they wrote.

Netflix is taking steps to increase its income by tightening rules on password sharing among its users and introducing a lower-cost ad-supported subscription plan, priced at $6.99 per month. These moves are under close scrutiny by analysts to determine their impact on the company’s expansion and sustainability of profits. (Next year, Netflix has announced it will no longer release quarterly membership figures.)

Despite a rise in membership, some experts are using Netflix’s relatively modest increase in viewing hours as an indicator of possible difficulties in the near future. In the first half of this year, Netflix announced that viewers watched 94 billion hours, representing only a 1% growth compared to the previous year. This potential drop in viewer engagement could strain Netflix’s efforts to boost prices, according to Robert Fishman, an analyst at MoffettNathanson, as expressed in his recent research report.

Netflix challenges this assessment, stating that their viewer interaction has remained robust, noticeably so after accounting for the impact of their password-sharing restrictions.

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2024-10-18 00:01

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