Netflix Significantly Outdoes Projected Net Subscriber Adds for Q3
Netflix significantly outperformed its forecast for Q3 global streaming net paid additions, delivering 2.41 million net new accounts, compared with 1 million in its July 19 forecast. But Q3 net adds were markedly lower than the 4.38 million in the…
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same 2021 quarter. It’s forecasting 4.6 million net adds in Q4, compared with 8.28 million in the 2021 quarter. “After a challenging first half, we believe we’re on a path to reaccelerate growth,” said the company’s shareholder letter Tuesday. Netflix will offer one low-priced ad plan -- called Basic with Ads -- at a price that’s 20%-40% below its current starting price (see 2210130058). In the U.S., Netflix will now start at $6.99 per month (compared with $9.99 today). The Basic with Ads plan will have less than five minutes of advertising per hour, plus “frequency capping and strong privacy protections,” it said. “The reaction from advertisers so far has been extremely positive and we believe that more choice, especially for more price conscious consumers, will translate into meaningful incremental revenue and operating profit over time.” Netflix cautioned it’s still in the “very early days” of its ad efforts. “Since we’re keeping our existing plans ad-free, it will take us time to build up our membership base and the associated ad revenue.” Netflix thinks it has a "thoughtful approach" to monetize account sharing, and it will begin rolling it out "more broadly" starting in early 2023, it said. It will offer the ability for "borrowers" to transfer their Netflix profile into their own account, and for "sharers" to manage their devices more easily and to create subaccounts if they want to pay for family or friends, it said.