Netflix beats subscriber estimates as ad tier grows
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Netflix on Thursday said it added more subscribers than expected, thanks to a 35% growth in membership to its ad-supported tier quarter-over-quarter between July and September.
Why it matters: For now, most of Netflix's growth is still driven by ad-free memberships. But the company expects ad-supported memberships to begin driving most of its growth by 2026.
- Netflix is available in nearly 200 countries globally, but its ad-supported tier is only currently available in the U.S., Australia, Brazil, Canada, France, Germany, Italy, Japan, and South Korea.
- The company plans to launch its proprietary ad tech stack later this year in Canada and more broadly in 2025.
Zoom in: Netflix's earnings report, which typically serves as a bellwether for the rest of the streaming industry, showed continued financial momentum.
- The company beat Wall Street estimates on top and bottom line growth for the third quarter. Shares in the streamer rose around 5% in response.
- As of the end of September, Netflix said it had 282.7 million global paid subscribers.
Yes, but: Because the streaming giant started to focus more on revenue growth, it will stop reporting subscriber increase figures as part of its earnings reports next year.
Zoom out: Netflix attributed strong subscriber growth to the launch of a few new hits, including TV shows like "The Perfect Couple," "Nobody Wants This" and the fourth season of "Emily in Paris," as well movies like "Beverly Hills Cop: Axel F," "Rebel Ridge" and "Officer Black Belt."
The big picture: Hollywood's momentum was stalled at the outset of the year thanks to the previous year's dual writers and actors strikes that delayed production and content schedules.
- Netflix said Thursday that it expects production to return to normal levels next year.
