Shulou(Shulou.com)11/24 Report--

On the morning of October 19, Beijing time, it was reported. Hollywood breathed a sigh of relief today when Netflix reported renewed growth in its third-quarter results.

Netflix, the leader in the streaming video industry, added 2.41 million paying users in the third quarter, exceeding expectations within the company and on Wall Street, and growing in all markets around the world. The company said in a letter to shareholders on Tuesday that it expects to add another 4.5 million paying users worldwide this quarter.

The number of paying households is rising, although Netflix is not growing as fast as it was a few years ago, but the company is at least back on track. The company said Tuesday that more users are signing up for paid services than it did earlier this year. This is good news for investors in Netflix and other video platforms after a sharp fall in share prices across the industry.

Reed Hastings, co-founder and chairman of Netflix, said: "thankfully, we have got rid of the quarterly decline."

Netflix shares rose 16% to $278.94 in after-hours trading after the earnings announcement. By Tuesday's close, Netflix shares were down 60 per cent so far this year. Shares of other streaming video companies, such as Roku and Disney, also rose on the back of Netflix's positive results.

In the third quarter, a strong lineup of new programs helped Netflix attract millions of new paying users. In the same quarter, Netflix released a new season of the hit American TV series "Strange things." In addition, Netflix has also released hit South Korean dramas "very lawyer Yu Yingyu", movies "Grey Shadow Man" and "Purple Heart Love", as well as crime drama "Monster: the Story of Jeffrey Damo." The latter is the second most popular English original series on Netflix.

Netflix's revenue for the quarter rose 5.9% from a year earlier to $7.93 billion, beating analysts' expectations. Profit of $3.1 per share also beat expectations. The number of paying households has increased to 223.1 million.

The exchange rate dilemma, however, may not be plain sailing for Netflix. Netflix will still face its slowest growth in years. The company lost 1.2 million paying subscribers in the first half of this year, leading investors to re-examine their investments in the streaming video industry. This year, Netflix's paying subscriber base in the United States has also shrunk.

At the same time, the strength of the dollar is also affecting the company's revenue and profits. While Netflix said it could adjust its content spending and pricing of paid services accordingly, its fourth-quarter revenue and profit outlook was lower than Wall Street expected. Netflix expects revenue of $7.78 billion for the quarter, below analysts' expectations of $7.98 billion. Earnings per share were 36 cents, a fraction of the $1.20 that analysts had expected.

"We are still not growing as fast as we expected," Spencer Neumann, Netflix's chief financial officer, said in an interview.

Income generation plan

Still, Hastings and the company's co-chief executive, Ted Sarandos (Ted Sarandos), believe that Netflix has a lot of room for growth. In a letter to shareholders, Netflix said that in the two largest markets, the us and UK, Netflix penetration is only about 8 per cent of that of televisions, and market share is growing every year. And unlike most of its competitors, Netflix is already profitable.

Netflix management plans to launch an advertising service in November and charge users for sharing account passwords next year to increase revenue. If you are willing to watch five-minute commercials per hour, users only have to pay $7 a month for a set meal, less than half the cost of the current hottest package.

Cheaper services can help Netflix retain customers or attract new customers in slowing markets. With fewer users watching regular TV, Netflix also believes it has an opportunity to capture billions of dollars in revenue that used to belong to live TV channels.

While investors have long focused on the number of new fee-paying households each quarter, Netflix is trying to persuade investors to focus on more traditional financial indicators, such as revenue and operating profit. As a result, Netflix said that the prospect of the number of fee-paying households will no longer be provided in the future.

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