Netflix’s CEO and Chief Content Officer Ted Sarandos says he feels “better” about the company’s $17 billion budget for content in 2022.
The company reported the addition of 2.41 million net global subscribers in Q3, more than doubling the adds the company had projected a quarter ago.
“Both the scope and scale, as well as the range and cadence of hits is improving,” Sarandos said during Netflix’s prerecorded Q3 earnings interview with his fellow execs, which was released Tuesday afternoon following the announcement of the third-quarter results.
So I feel better and better about that $17 billion of content spend because what we have to do is be better and better at getting more impact per billion dollar spent than anyone else.
“And that’s how we’re focusing on it. So I think we’re spending at about the right level. And as we reaccelerate revenue, we’ll revisit that number, of course. But we’re a pretty disciplined bunch about that.”
Netflix specifically called out these Q3 titles as “some of our most watched series and films of all time”: Ryan Murphy limited series “Dahmer: Monster: The Jeffrey Dahmer Story,” the second half of “Stranger Things” Season 4, Korean series “Extraordinary Attorney Woo,” and movies “The Gray Man” and “Purple Hearts.”
Netflix shares also skyrocketed more than 14% after the bell Tuesday as the company posted better-than-expected results on the top and bottom lines.
The majority of Netflix’s net subscriber growth during the quarter came from the Asia-Pacific region, which accounted for 1.43 million subscribers. The U.S.-Canada region had the smallest growth of Netflix’s regions, contributing just 100,000 net subscribers.
Later in the Netflix earnings interview, Sarandos spoke about what is highly anticipated to be a Q4 hit for Netflix, the “Knives Out” sequel “Glass Onion,” which will be released in theaters — but only for one week and on limited screens.
“We’re in the business of entertaining our members with Netflix movies on Netflix,” Sarandos said.
“So that’s where we focus all of our energies and most of our spends. Our films are always heavily featured in film festivals around the world because they are in demand, made by the greatest filmmakers on the planet.
“For all those folks who can’t get to a city where a festival is, this one-week release on 600 screens is a way of creating access to the film and building buzz, the same thing we’re doing in those festivals.”
Additionally, Netflix will begin to crack down on password sharing next year, opting to allow people who have been borrowing accounts to create their own. The company will also allow people sharing their accounts to create sub-accounts to pay for friends or family to use theirs.
It also teased the addition of its new lower-priced ad-supported plan, which launches in 12 countries in November.
The streamer said it was “very optimistic” about its new advertising business. While it doesn’t expect the new tier will add a material contribution to its fourth-quarter results, it foresees membership growing gradually over time.
“We’re still not growing as fast as we’d like,” Spencer Neumann, Netflix’s chief financial officer, said during the company’s earnings call. “We are building momentum, we are pleased with our progress, but we know we still have a lot more work to do.”