Netflix subscriber numbers re-ignite after slow start to year

Netflix has reported that it gained more than 2 million subscribers in the recent quarter, calming investor fears that the streaming giant was losing paying customers.

The company said on Wednesday it ended the third quarter with slightly more than 223 million subscribers worldwide, up some 2.4 million, after seeing subscriber ranks ebb during the first half of the year.

Netflix shares shot up more than 14 percent in after hours trading to $275 on the earnings news.

"Well, thank God we're done with shrinking quarters," Netflix co-chief executive said during an earnings call.

"We're back to the positivity; we've got to pick up the momentum."

The turn-around in subscriber growth comes as Netflix is poised to debut a subscription option subsidised by ads in November across a dozen countries.

READ MORE: Netflix subscriber numbers drop for second straight quarter

The new "Basic with Ads" subscriptions will be priced at $6.99 in the United States -- three dollars less than a no-ads basic option, Netflix chief operating officer Greg Peters said in a briefing.

"The timing is great because we really are at this pivotal moment in the entertainment industry and evolution of that industry," Peters said.

"Now streaming has surpassed both broadcast and cable for total TV time in the United States."

Covid 'logjam'

Netflix expects to add another 4.5 million subscribers in the final quarter of this year.

"Although international growth continues, the US video streaming market is hitting its ceiling for subscribers," said Third Bridge analyst Jamie Lumley.

"After periods of rapid expansion and extraordinary spending, Netflix, Disney and their competitive set will soon be forced to focus on improving margins and cutting back on content spending."

Netflix said in a letter to shareholders that it believes its competitors have been losing money as they invest heavily to win audiences.

Netflix reported a quarterly profit of $1.4 billion on revenue of $7.9 billion – a net income slightly less than in the same period a year ago when it brought in more money.

Netflix plans to hold steady with spending some $17 billion a year on content, said co-chief executive Ted Sarandos.

READ MORE: Netflix partners with Microsoft to offer cheaper subscription plan