Netflix ‘done with shrinking’ as it reverses subscriber slump ahead of new ad-supported streaming option
- The streaming giant is working to kick-start membership growth with a US$7 ad-supported tier after subscribers shrunk by 1.2 million in the first half
- Netflix has been hit by a rocky global economy and new competition, especially in the US, where the market has reached maturity
Shares of Netflix jumped 14 per cent in after-hours trading, boosted in part by the streaming giant’s forecast that it would pick up 4.5 million customers in the fourth quarter. The company’s stock, an investor favourite during its years of rapid growth, had fallen nearly 60 per cent this year before the earnings report.
“Thank God we’re done with shrinking quarters,” said co-CEO Reed Hastings, adding the company needs to continue gathering momentum by focusing on content, marketing and a lower-priced plan with advertising.
From July through September, Netflix attracted 2.4 million new subscribers worldwide, more than double what Wall Street expected.
“Netflix’s impressive numbers show the company’s growth story is far from over,” said Investing.com analyst Haris Anwar.
During the quarter, Netflix released the final episodes of season four of sci-fi hit Stranger Things, plus serial-killer series Dahmer – Monster: The Jeffrey Dahmer Story, which became one of Netflix’s most-watched series of all time.
The streaming giant is working to kick-start membership growth after a sudden decline in the first half of the year, when the company’s subscriber base shrunk by 1.2 million amid a rocky global economy and growing competition for online video viewers. Netflix now has a total of 223.1 million subscribers around the world.