Despite price increases

Netflix customer growth exceeds expectations

Scene from "Nobody Wants This"

(Bild: Netflix)

Supported by the success of the crime series "The Perfect Couple" and the romantic comedy "Nobody Wants This", Netflix gained more than five million new customers in the past quarter. The growth of the video streaming market leader was strongly driven by the cheaper offer with advertisements.

The cheapest subscription recently had 35 percent more users than three months previously. The streaming service also announced a quarterly profit above market expectations on Thursday. "We delivered on our plan to reaccelerate growth and look forward to closing out the year with a great fourth quarter." Netflix now has a total of around 282.7 million customer households. According to the company, customers spend an average of two hours a day on the service.

Netflix increased its revenue in the third quarter by 15 percent year-on-year to a good 9.8 billion dollars, with the bottom line jumping to 2.36 billion dollars from around 1.68 billion dollars a year earlier.

For the current quarter, Netflix is hoping for a further boost from the second season of the successful South Korean series "Squid Game", among other things, and is again expecting revenue growth of almost 15 percent.

Crackdown on password sharing drives up user numbers
The streaming service has been taking action against the sharing of access data since last year. This is also driving growth in user numbers. Many former free riders have taken out their own subscription instead of turning their backs on Netflix.

Advertising pays off
The streaming service expects its ad-financed offerings to increase profits in the long term, as the revenue per user is higher than through subscription fees alone. However, advertising revenue is not expected to make a significant contribution to growth until 2026 at the earliest. In the past quarter, more than half of new customers opted for ad-financed access.

More live events
To keep these users in front of the screen for as long as possible, Netflix is increasingly focusing on live events and sports broadcasts. A boxing match between YouTube star Jake Paul and former world champion Mike Tyson is planned for November. From December, the streaming service will also broadcast selected games from the US NFL football league.

"Advertisers want to be part of great cultural moments," said Mike Proulx, Chief Analyst at research firm Forrester. "Captivating live programs will always gather and unite people in front of the screen for a moment. For brands, that's a captive audience ripe for advertising messages."