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Netflix was the first major TV and film streamer out there, but it didn’t dominate the market for long. It seems like every media company is trying to create a streaming service – from Disney, NBC and HBO to Amazon Prime, Apple and Hulu … There are too many to name at this point. And Netflix’s numbers started to reflect the strain of competition. In the first half of this year alone, it lost 1.2 million customers.
But, in a surprise turn of events, Netflix has made a solid comeback over the past few months. It’s finally seeing growth again, with 2.4 million customers added in the third quarter. The company itself had projected less than half of that. After the results were released, the company’s shares skyrocketed 14% by the end of trading.
With that announcement comes bad news for some: Netflix will start majorly cracking down on password sharing in 2023. Instead, the streaming platform will offer an option to create sub-accounts for a fee to help ensure that friends and family who piggyback on existing accounts are paying up. It will also roll out profile transfers for people needing to migrate their stuff onto their own – paid – accounts.
“We’re still not growing as fast as we’d like. We are building momentum, we are pleased with our progress, but we know we still have a lot more work to do,” said Netflix CFO Spencer Neumann during a company conference call.
“After a challenging first half, we believe we’re on a path to re-accelerate growth. The key is pleasing members,” Netflix said in its quarterly letter to shareholders.
“If there’s a unifying narrative for Netflix in 3Q22, it’s that the worst appears behind it,” said Wells Fargo analyst Steven Cahall in a note to clients.