Netflix said it added more than eight million subscribers in the three months to June, reeling in audiences for the new season of Bridgerton and new drama Baby Reindeer.
The gain was almost double what investors had predicted, proving the lasting power of the firm’s tightened restrictions on password sharing.
But the streaming giant warned the impact of the crackdown on sharing passwords may run out in coming months, leading to slower growth in the months ahead.
It said it was looking into new areas, such as sports, live events and gaming to extend its lead.
Its plans include a multi-player video game tied to the release of a new season of the popular dystopian series Squid Game later this year, as well as offerings linked to shows such as Emily in Paris.
“If we execute well – better stories, easier discovery and more fandom – while also establishing ourselves in newer areas like live, games and advertising, we believe that we have a lot more room to grow,” the company said to investors.
For now, the streaming giant remains the leader to beat for the industry.
The gains last quarter brought its total number of subscribers to more than 277 million globally.
With more than two people in most households, it estimated that its total audience numbers more than 600 million.
In the UK, Netflix’s cheapest package, which comes with adverts, costs £4.99. The same deal in the US costs $6.99.
Netflix said its ads business was making “steady progress”, with subscriptions to the plan up 34% in the quarter.
But it did not share the total number and warned that the ads business would not start having a meaningful impact on revenue until 2026, noting that for now, subscribers were growing far faster than advertisers.
Jamie Lumley, an analyst at Third Bridge, said while Netflix’s ad-supported tier continued to be an “important part of the subscriber growth”, it had “yet to prove itself from a revenue standpoint”.
“Our experts highlight that Amazon has made a much bigger splash in the ad market and Netflix needs to continue working on scale in this segment if it wants to be a major player,” he added.
Total revenue was $9.56bn, up 17% compared with the same period in 2023, while profits were $2.15bn, compared to $1.5bn a year ago.
The firm said it was expecting year-on-year growth of 14% in the July-September period. – BBC
By Natalie Sherman