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Netflix Reverses Decline, Adding 2.4 Million Subscribers

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Netflix said Tuesday that it added greater than 2.4 million subscribers within the third quarter — mainly from outside america — snapping a streak of customer losses this yr that spurred uneasiness amongst investors and questions on how way more the streaming business could grow.

The streaming giant said it now has 223 million subscribers worldwide, after beating its earlier forecast of about a million additions for the quarter. Netflix lost 200,000 subscribers in the primary quarter, and nearly a million within the second.

“After a difficult first half, we imagine we’re on a path to re-accelerate growth,” Netflix said in its quarterly letter to shareholders. “The secret is pleasing members.”

Netflix is preparing to introduce promoting on its service on Nov. 3, a part of a bid to draw more customers with a lower-cost subscription. The advertising-supported tier, priced at $6.99 a month in america, will show subscribers 4 to 5 minutes of ads per hour of content they watch.

Netflix generated about $7.9 billion in revenue within the third quarter, a virtually 6 percent increase from the identical period last yr. The corporate generated about $1.4 billion in profit, a 3 percent decrease from a yr earlier.

The choice to introduce an promoting option on Netflix was an about face for the corporate, which for years had highlighted its ad-free experience as a selling point for patrons. But this yr, after announcing subscriber losses on the corporate’s first-quarter earnings call, the co-chief executive Reed Hastings reversed course, saying that an advertising-supported plan would allow customers to decide on their experience.

Streaming has grow to be an increasingly competitive industry lately. Disney, as an illustration, reported in August that it had about 221 million subscriptions across its bundle of services. It’s going to start offering a lower-priced promoting tier for Disney+ in December.

Netflix is breaking with convention in other ways this fall. The corporate plans to release “Glass Onion: A Knives Out Mystery,” in 600 theaters across america for one week starting on Nov. 23 ahead of its streaming debut, the primary time the corporate has struck a take care of the nation’s largest theater chains without delay. The movie, written and directed by Rian Johnson, is the anticipated follow-up to the 2019 hit starring Daniel Craig because the Delphic detective Benoit Blanc.

Netflix told employees earlier this yr that it was also planning to crack down on password sharing, which allows users to observe content without paying for a subscription. The research firm MoffettNathanson estimates that 16 percent of Netflix users share passwords, greater than every other major U.S. streaming service. Netflix said in April that passwords were being shared with a further 100 million households, based on its estimate.

The corporate has also cracked down on costs. In May, Netflix laid off about 150 staff across the corporate, primarily in america, or about 2 percent of its total work force. Netflix said in an announcement the cuts were spurred by the corporate’s slower revenue growth.

Despite the changes, Netflix hasn’t yet been in a position to reverse a precipitous decline in its share price. The corporate’s stock has tumbled greater than 60 percent during the last yr amid a broader market slump, as investors and analysts grapple with the economics of streaming video.

Through the third quarter, Netflix released a mixture of movies and TV shows, including “The Gray Man,” a big-budget motion film starring Ryan Gosling and Chris Evans and directed by Joe and Anthony Russo, the sibling filmmakers behind “Avengers: Infinity War.” Other popular titles included the serial killer show “Monster: The Jeffrey Dahmer Story”; the romantic drama “Purple Hearts”; and “Stranger Things,” which released the second half of season 4 near the tip of last quarter.

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