Shares in Netflix jumped this week after the streamer revealed it added more than 2.4 million subscribers in the third quarter, putting an emphatic end to a streak of customer losses.
The company announced it now has 223 million subscribers around the world. Netflix more than doubled its projection of adding 1 million subscribers during the quarter, a remarkable turnaround after reporting losing 200,000 subscribers in the first quarter of the year and nearly one million in the second.
The streaming giant’s quarterly earnings showed it generated about $7.9 billion in revenue, a nearly 6% rise from the same three months last year. Profit was down 3% over the same period, to $1.4 billion.
“After a challenging first half, we believe we’re on a path to re-accelerate growth,” Netflix wrote in its quarterly letter to shareholders. “The key is pleasing members.”
This month Netflix revealed its advertising tier will be rolled out on November 3, as it bids to attract more customers with a cheaper subscription option. The new subscription tier will cost $6.99 in the United States and show users four to five minutes of advertising per hour.
Netflix expects to add 4.5 million subscribers in the fourth quarter of the year, which would be a 46% decrease from that period last year. It also revealed it would no longer provide guidance to investors on its projected subscriber numbers from next quarter.
The company also addressed the competitive market in which is operates, and made a clear swipe at other companies in the industry. “Netflix has higher engagement than any other streamer – with room for growth,” the company said. “Our competitors are investing heavily to drive subscribers and engagement, but building a large, successful streaming business is hard – we estimate they are all losing money.”