Netflix’s 3rd-quarter subscriber growth is good news for the company

Some good news for Netflix, with subscriber gains in the third quarter. This is particularly important, as Netflix’s subscriber count is declining.

The good news: Netflix’s net subscriber count is up 9.3 percent in the third quarter, to 23.5 million. This number represents a very strong 3.5 percent increase quarter-over-quarter, and is up from the 25 million that Netflix reported in the second quarter.

That’s better than analyst consensus. Comcast is calling Netflix’s third quarter subscriber growth “sizable.” In a note to investors, Comcast CFO David Cohen said Netflix’s 3.5 percent growth is a big win for the overall video-streaming business—but he cautioned there’s no guarantee that this growth will continue or that Netflix will “attain the level of scale at which video-streaming is currently driven.”

For Netflix, this is also good news. In 2016, the company’s stock fell from $100 a share to a low of $8 a share in November, down to the current level of $95.

Netflix is having the best quarter in years, and I think this is going to be the start of a very good year for the company.

The bad news

The other bad news for Netflix? The company’s third-quarter subscriber gain was almost entirely driven by customers who used streaming to binge on television shows, rather than the people who just want to stream Netflix.

In fact, I can’t even get Netflix to show me any of the shows that I actually want to watch, like The Office. There are a handful of shows that I want to watch, but I don’t actually want to watch them, like The Office or Scrubs. Netflix still shows me The Office episodes from last season, when I already know that I don’t want to watch those.

That’s good for Netflix, because it means that the company’s customers aren’t just watching Netflix when they want to stream Netflix. This quarter, Netflix is getting more from people who are watching shows and movies because they want to stream Netflix, and not because they want to stream shows and movies.

Netflix’s subscribers are choosing to watch shows and movies on their TV screens, because they want to stream those shows on their screens—and, to a certain degree, it works.

Netflix, by the way, added 100,000 new subscribers in the third quarter—significantly more than analyst consensus—and the company

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