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‘Stranger Things’ Helps Netflix Increase Subscribers

The streaming giant regained some footing after losing U.S. subscribers this year. But new rivals will make it tough for that growth to continue.

Netflix’s best-known series, “Stranger Things,” drew 64 million viewers in its first four weeks.Credit...Netflix

Netflix has stemmed the bleeding. The streaming juggernaut overcame its rare moment of weakness from last quarter to add 6.8 million new customers this quarter, the company reported on Wednesday, with 520,000 of them in the United States.

The rebound, after a loss of 126,000 customers domestically earlier in the year, helped Netflix recover some investor confidence as it faces an onslaught of new streaming competitors.

Still, the results for the September period were slightly lower than the company’s forecast and presage the coming competition in a field it has dominated. Netflix had been expected to add about seven million customers, with 800,000 in the United States.

The company also reported a large jump in profit, to $665 million, on $5.2 billion in revenue, handily beating Wall Street’s income estimates of about $470 million. Netflix stock jumped more than 8 percent in after-hours trading Wednesday. The company’s market value had dropped sharply since its last earnings announcement in July, with shares having traded down more than 20 percent before the most recent report.

Netflix, led by Reed Hastings as chief executive, forecast steady growth for the rest of the year. The company said it expected to add 7.6 million total new customers in the next quarter, with about 600,000 for the United States. That was below the 9.4 million that Wall Street had expected and hints at the pending competition.

Mr. Hastings tamped down the significance of the newer entrants, citing how Netflix has been competing against streaming services like Amazon and YouTube for years, as well as traditional television.

“Fundamentally there’s not a big change here,” he said on the earnings call after the announcement.

The third-quarter results benefited from Netflix’s best-known series, “Stranger Things,” which introduced its hugely anticipated third season over the Fourth of July weekend. The series drew 64 million households in the first four weeks it was available, the company said.

Netflix, which started as a DVD-by-mail service, has become a dominant force in Hollywood, and its disruptive growth has reordered the television landscape. It often outspends its rivals and has forced the industry’s biggest players to embrace streaming as they abandon, albeit slowly, the pay-television model.

Netflix is the nation’s largest digital television network, with over 158 million customers around the world, including 60 million in the United States.

That audience has become critically important as well-financed rivals wait in the wings. On Nov. 1, Apple plans to unveil its streaming product, Apple TV Plus; 11 days later, the Walt Disney Company intends to start Disney Plus, which will feature Marvel’s biggest franchises, the complete “Star Wars” library and the Disney content vault.

In a cheeky marketing stunt, Disney owned Twitter for a few hours on Monday when it promoted its service on an epic thread with a seemingly endless string of titles (both famous and obscure) that will appear on Plus. Not to be outdone, Jennifer Aniston, who stars in Apple’s new signature series, “The Morning Show,” drew Instagram’s attention Tuesday when she finally joined the social platform.

Both streamers will come stocked with original films and series, and both will cost about half the price of Netflix. (By early next year, Netflix will face another competitor: AT&T’s HBO Max.)

Mr. Hastings took a light jab at both companies. “It is interesting that we see both Apple and Disney launching in the same week, after 12 years of not being in the market,” he said. More seriously, he added, “Disney is going to be a great competitor, Apple is just beginning but it’ll probably have some great shows, too.”

Later, he summed it up this way: “We’re all competing against linear television, not really competing against each other.”

Still, the new services are likely to hold down Netflix’s trajectory, and the fourth quarter is also traditionally its most lucrative period when it adds the most subscribers.

Netflix plans a new line of attack at the end of the year. It will release more than half a dozen high-profile features over the coming months, including Michael Bay’s “6 Underground,” Eddie Murphy’s “Dolemite Is My Name” and perhaps its most ambitious screen effort to date, Martin Scorsese’s “The Irishman,” which cost $159 million.

Ted Sarandos, the head of Netflix’s content studio, called the new slate the “theatrically ambitious” movies that can be watched in the home. That could “fundamentally change the economics of how people enjoy films,” he said.

Edmund Lee covers the media industry as it grapples with changes from Silicon Valley. Before joining The Times he was the managing editor at Vox Media’s Recode. More about Edmund Lee

A version of this article appears in print on  , Section B, Page 3 of the New York edition with the headline: ‘Stranger Things’ Helps Netflix Rebound in Third Quarter. Order Reprints | Today’s Paper | Subscribe

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