Q3 Results Suggest Worst Ss Behind Netflix, Shares Rally
Shane Neagle | Oct 19, 2022 01:43PM ET
Shares of Netflix (NASDAQ:NFLX) are trading sharply higher on Wednesday after the streaming giant reported better-than-expected Q3 2022 results across the board. Netflix new lower-priced ad-supported plan , which is set to launch in 12 countries in November. The new tier will become available in the U.S. on Nov. 3 and will be priced at $6.99 per month.
The more affordable subscription plan, dubbed “Basic with ads,” will include 4-5 minutes of ads each hour. Users who opt for this tier will not be able to download films and TV shows and will have access to a limited number of titles to watch.
Commercials will last around 15 to 30 seconds each and will be displayed before and during a movie or a TV show. Netflix will allow companies to prevent their commercials from appearing on the content they consider unsuitable and will help them gain insights into the ads’ reach with the help of ratings company Nielsen.
The new ad-supported plan comes after weak subscriber growth in the previous quarter, even though Netflix remains the biggest streaming platform with more than 221 million subscribers.
The company said it feels “very optimistic” about the new tier and even though it does not expect the ad-supported plan to have a significant impact on Q4 results, it believes it will help the company grow the number of subscribers gradually.
Summary
Netflix shares traded higher on Wednesday after the company delivered a very strong Q3 earnings beat. Investors are likely to see the Q3 report as a corner turned for Netflix after the company lost nearly 1 million subscribers in the second quarter.
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