Netflix, based in Los Gatos, reported an increase in subscribers, adding over five million in the last quarter. Despite this positive news, the company also noted a slowdown in its growth rate. The streaming giant now boasts a total of 282.7 million subscribers, with a profit of $2.4 billion and revenue of $9.8 billion, a 15 percent increase from the previous year.
The company highlighted its efforts to expand its U.S. advertising business, with plans to launch in Canada by the end of the year and in other countries by 2025. Netflix expressed optimism about finishing the year on a strong note, with an exciting lineup of shows, including the highly-anticipated second season of “Squid Game,” which remains the most-watched Netflix series to date.
In addition to new content releases, Netflix will also be streaming a boxing match featuring Mike Tyson and Jake Paul, as well as two NFL games on Christmas. Membership in the ad-supported plan saw a 35 percent increase quarter-over-quarter, with over half of new sign-ups opting for this option in available countries.
However, some analysts have cautioned that Netflix needs to be cautious about integrating ads into its programming to avoid compromising the viewer experience. Emarketer senior analyst Ross Benes also predicted that U.S. ad revenue would only make up a small portion of the company’s overall earnings.
To address slowing growth, Netflix introduced an ad-supported subscription offering last year and discontinued its cheapest ad-free plan in certain regions. The company has also started offering combined packages with former competitors like Peacock and Apple TV in the U.S., expanding its reach to new audiences.
Netflix’s decision to develop an in-house advertising platform reflects its commitment to leveraging customer data for targeted advertising. This move marks a shift away from its previous partnership with Microsoft for advertising technology.
Despite these strategic initiatives, Netflix has acknowledged that its subscriber growth may decelerate in the future. The company’s shares have seen positive performance this year, positioning Netflix as a dominant player in the video content market. In comparison, Disney+ continues to face challenges nearly five years after its launch, struggling to compete with Netflix’s extensive content library and subscriber base.