Netflix Tops Q3 Forecasts as the Service Schedules Changes

Netflix beat Q3 expectations, adding more than 2.4 million subscribers, more than twice the StreetAccount projection. The majority of growth was generated in the Asia-Pacific region, accounting for an additional 1.43 million paid accounts, while North America increased by 100,000. Improvements on the top and bottom lines sent Netflix shares surging more than 14 percent after Tuesday’s bell. Revenue was $7.93 billion, versus a $7.837 billion Refinitiv estimate. That was up almost 6 percent from Q3 2021, although the $1.4 billion in profit represents a 3 percent decrease from the same period last year. Meanwhile, Netflix will launch its ad-supported tier in two weeks and plans to start cracking down on account sharing in 2023.

The results prompted LightShed Partners analyst Rich Greenfield to tell The New York Times “the reports of streaming’s death or maturity have been greatly exaggerated,” with Netflix positioned to flourish in an increasingly competitive field. And Q4 could also be strong for Netflix, which is preparing to launch a $6.99 ad-supported tier on November 3. Netflix without ads costs $9.99 per month, its top-shelf HD tier $19.99.

In its Q3 shareholder letter, Netflix says it expects to add 4.5 million subscribers in Q4, which is 46 percent less than the 8.3 million subscribers accrued in Q4 2021. Starting next quarter, Netflix “will no longer provide guidance for its paid memberships but will continue to report those numbers during its quarterly earnings release,” writes CNBC.

Additionally, Netflix flagged 2023 as the year it will begin cracking down on password sharing, To help with that, the company on Monday revealed a new feature called Profile Transfer, which lets users move their “personalized recommendations, viewing history, My List, saved games, and other settings” when moving their membership to a new account, the company said in a press release.

“Netflix has estimated that more than 100 million households are accessing the service through shared accounts,” writes The Verge.

Unauthorized piggy-backers can now be forced to start their own account with a minimum of inconvenience using Profile Transfer. “Netflix wants to ease that transition so newly solo users aren’t starting from scratch,” The Verge says, adding that when members part ways, for whatever reason, now one won’t be “stuck awkwardly staring at their name” with every login.

After months of testing, the new feature, which Netflix says was much-requested, as of Monday rolled out “to all members around the world.”

Previously, those who wanted to start new accounts had to start from scratch, losing their personalized data, says Protocol, noting, “Smart TV platforms like Google TV and Amazon’s Fire TV have gotten into the game as well, offering their users systemwide profiles.”

Netflix Gains 2.4 Million New Subscribers, Reversing Trend, The Wall Street Journal, 10/18/22
Netflix Exploring Cloud Gaming to Bring Titles to TVs and PCs, Will Establish In-House Games Studio in Southern California, Variety, 10/18/22

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