How bad does the world need its fix of Netflix (NASDAQ:NFLX)? Enough to continue watching despite countless price hikes. Despite worries about an economic slowdown, the company shocked the world by adding 8.8M subscribers in Q3 2023, nearly 4x more than the year prior. They added over $355M in new revenue, bucking a slowdown that has troubled its media competitors — crediting its star-studded performance to two special guests:

• Old users… Netflix booted password-sharers last quarter — but rather than running off, many converted into paying customers.
• “New users…” which cropped up in large numbers on Netflix’s cheaper, ad-supported plan: subscriptions grew 70% quarter-over-quarter, accounting for nearly 30% of new sign-ups in the 12 ad-supported markets.

Auditioning for new roles: The move sent Netflix soaring 16% yesterday and gained a number of upgrades from major banks like Morgan Stanley, which remained bullish over their ad-supported plan growth. The streaming giant is already a staple of peoples’ media diets and, increasingly, their cultural ones as well. Netflix recently announced plans to open brick-and-mortar stores and ramp up its gaming business around its most popular shows. It’s also leaned on another time-tried tradition to juice its revenue…

Killing the favorite character (password-sharing) wasn’t enough

Netflix is testing its luck with binge-watchers by raising prices on some plans by 15-20% in the US, UK and France, the first hike since January 2022. Since then, most competitors have raised prices — signaling the end of cheap content. But nobody is in the same zip code as Netflix, who’s Selling Sunset in 90210 while other media giants are packing their bags…

• Per Nielsen’s The Gauge data, Netflix pulled 7.8% of all US TV screen time in September 2023, the highest of any paid streaming service — second only to YouTube’s 9% screen time.
• Close competitors Disney+ and WarnerMedia’s Max weren’t even close to the ‘flix — together, they pulled 3.1% of screen time, less than half of Netflix’s.

The show must go on: Netflix is a bright spot for the media business, which has been frozen for six months amid Hollywood strikes. Despite this, Netflix is forecasting 10.7% yearly sales growth in Q4, but ending the strikes will be instrumental for Netflix if it wants to churn out content — and keep its millions of new subscribers.