• by Wayne Friedman , October 18, 2024

Netflix had 5.1 million new subscribers in the third quarter -- but this was viewed at a mixed result for some analysts. 

“User growth slowed sequentially...  down from 8.05 million net adds in the second quarter,” says Laurent Yoon, media analyst for Bernstein Research. 

He added that new subscribers “came in above Wall Street expectations [4.5 million] but below buy side expectations -- 5.0 million to 6.5 million.”Total global Netflix subscribers now total 282.7 million subscribers.

In the U.S. and Canada -- the company’s most mature market, which contributes 44% of its overall revenue -- Netflix had net additions of 690,000 subscribers to total 84.8 million subscribers. In the second quarter, the U.S./Canada market added 1.5 million. 

Overall Netflix revenue rose 15% in the period to $9.8 billion, with operating income up 30% year-over-year to $2.9 billion.

For full-year 2025, the company expects similar revenue trends -- up 15% to between $43 billion to $44 billion.

Average revenue per member in the third quarter grew 5% to $17.06 per month.  

For its closely watched and still new advertising-supported option, in markets where the ad option is available, 50% of new subscribers signed up for that service, the company said. For its ad-supported option, subscribers were also up 35% versus the second quarter.

With regard to the future of its advertising option, Greg Peters, co-CEO of Netflix, said on a call with analysts on Thursday: “Priority number one was we have to grow our ad-tier membership so that we can get to sufficient scale, to be relevant in each market for advertisers. And the big priority number two was we have to improve our capabilities and attractiveness to advertisers and therefore, the monetization of all that inventory.”

Peters added that the company is getting “healthy CPMs” and that the ad business will not be a primary driver next year because the company is still "scaling that audience and that inventory faster than our ability to monetize it.”

For the completed upfront this past summer, Peters says the company witnessed an 150% increase in ad revenue. Next year he expects ads revenue will roughly double year-over-year, “albeit off a small base.” 

Also on Thursday, Ted Sarandos, co-CEO of Netflix, said members now average a “very healthy” two hours of viewing per day.

Big hits for the company in the most recent period were “Perfect Couple”, “Monsters: The Lyle and Erik Menendez Story,” and “Nobody Wants This,” Sarandos said.