The global streaming giant Netflix took a sigh of relief after witnessing a significant increase in its global paid subscriber base. The company released the financial results of the third quarter ended on September 30, 2022. The number of Netflix subscribers reached 223.09 million in Q3 2022, with a 4.5% YoY growth. That’s the addition of more than 2 million subscribers in a quarter.
Out of the total 2.41 million net additions in Netflix global paid memberships in Q3 2022, approximately 1.429 million were added in the Asia-Pacific region alone. This is followed by 568 million in the EMEA region, 312 million in Latin America, and 104 million in the United States and Canada.
These figures, however, are not as compelling as they appear. Out of all four major regions, only the US and Canada witnessed a strong 42% YoY growth in its net paid subscriber additions in Q3 2022. Rest all experienced a massive YoY decline in their net addition of paid memberships during the quarter. The EMEA region recorded a 69% YoY decline, Asia-Pacific recorded a 34% YoY decline and Latin America recorded a 5% YoY decline.
The APAC region also witnessed a notable 13% YoY decline in its average revenue per membership during the third quarter.
Netflix shares increased more than 14% in after-hours trading to $275.80 after the earnings release.
“After a challenging first half, we believe we’re on a path to reaccelerate growth. The key is pleasing members,” Netflix stated in a Letter to Shareholders.
The OTT platform has been losing its subscribers since the beginning of 2022. In the first quarter, Netflix lost 0.203 million global paid subscribers, which led to a loss of one-fourth of its value as the stock price tanked 25% within a day. While in the following quarter, it lost 0.969 million paid subscribers. Due to this, Investors, stock traders, and analysts were concerned about the growth of the OTT giant.
Netflix’s efforts paid off well to increase subscribers
Netflix has implemented a number of strategies in an effort to increase the number of paid subscribers as well as revenue. After losing over 1 million (1.172 million to be precise) in the first half of 2022, the company decided to tighten the noose around users sharing or sub-selling their accounts to friends or family. The password-sharing on Netflix is no longer free, but only in certain countries. This move was also intended to get rid of some freeloaders.
In addition, the company has announced a lower-priced ad-supported plan, that will launch in November 2022. The new “Basic with Ads” subscriptions will be priced at $6.99 a month in the United States. However, many analysts believe that this will be another uphill battle for the OTT giant as this ad market is already too crowded.
“We are looking at a very light ad load with no more than four to five minutes of ads per hour, and including some very tight frequency caps so that members don’t see the same ad repeatedly,” said Netflix chief operating officer Greg Peters.