Netflix, which has about 223 million subscribers worldwide, will soon introduce a lower-priced, ad-supported service in a bid to attract more customers.
Netflix recently said it added more than 2.4 million subscribers in the third quarter – mostly from outside the United States – ending a string of customer losses this year that has sparked unease among investors and triggered a series of questions about how much the streaming business could grow.
The streaming giant said it now has 223 million subscribers worldwide, after exceeding its previous forecast of about one million additions for the quarter. Netflix lost 200,000 subscribers in the first quarter and nearly a million in the second.
“After a challenging first half, we believe we are on track to reaccelerate growth,” Netflix said in its quarterly letter to shareholders, as quoted by Reuters.
“The key is to please the members.”
Netflix is preparing to introduce advertising to its service on November 3 as part of an attempt to attract more customers with a subscription at a lower cost. The sustained level of advertising, priced at $6.99 per month in the United States, will show subscribers four to five minutes of ads per hour of content they watch.
Netflix generated revenue of about $7.9 billion in the third quarter, an increase of nearly 6% over the same period last year. The company generated profits of about $1.4 billion, a 3% decrease from the previous year.
Netflix shares rose more than 10% after announcing results. Netflix said in the letter to shareholders that it expects to add 4.5 million subscribers in the fourth quarter, a 46% drop from the 8.3 million subscribers it added in the same period last year. Netflix also said it will stop providing guidance to investors on its estimated subscriber numbers starting next quarter.