Netflix’s third-quarter earnings have revealed that the leading streaming service’s subscriber count rose by nine million, to an all-time high of 247 million paid users. It may seem like business as usual for the streaming giant, but all eyes were on Netflix this year following its password crackdown and Hollywood strikes that threatened to interfere with the company’s output.

The Success of Streaming

Netflix’s new figures show that their password crackdown has had its intended effect, bringing new paid users on board and increasing the profitability of the company. More broadly, streaming is going from strength to strength as writers cinched success-based residuals in a growing and competitive market.

Even outside of popular video-on-demand services, websites online offer streamed entertainment to much larger audiences. Spheres like YouTube and iGaming websites also feature live streaming, where people can send a broadcast out to interested parties. They occupy all ends of the spectrum, from individuals at home to live game shows like Crazy Time, providing entertainment and a degree of interactivity that you don’t get with Netflix shows. Both streaming and live streaming online are growing markets while cable and broadcast television slump.

While it’s celebrations all around for Netflix and similar platforms, there is a concern on the horizon. Every bubble bursts and, given the increasing list of big-name competitors that enter the fray, services run the risk of oversaturation. They could recreate cable TV via a roster of paid channels that each offer exclusive content but for more cost to the consumer. 

Netflix’s Third Quarter

The details of Netflix’s third quarter paint a clearer picture of where they are today. After reporting an influx of 5.9 million new subscribers in the second quarter, they exceeded expectations by almost double at 9 million new users. 

They also technically beat revenue expectations by cutting costs. They were pegged to make $8.5 billion in revenue against a $1.9 billion operating budget. The $8.5 billion figure was accurate to the digit, though they lessened operating costs to $1.7 billion and so made higher profits as a result.

But for various reasons, 2024 schedules are looking bare. Netflix may have stormed through this summer, but can it maintain that during the fourth quarter? Netflix’s projections, which seem to be built off this quarter’s success and assuming the continued subscriber increases, estimate its revenue will reach $8.7 billion. They also expect to match or beat nine million new users but are prepared to see a slight drop in new subscriber rate if business slows.

Many predicted business would slow two quarters ago after Netflix started to roll out its password-sharing crackdown in its largest markets. However, the availability of a cheaper subscription option seems to have offset any losses. Those cheaper accounts also serve ads, meaning that Netflix monetizes those users in another way. Through shrewd management and a little luck, Netflix’s 16-year streak of success continues.