Netflix's (NFLX 0.88%) business has been growing rapidly in a number of important ways. In the company's third quarter, revenue, operating profits, and earnings per share jumped 36%, 130%, and 207% year over year. But one of the most important areas where Netflix has been growing at a rapid clip on a consistent basis is its streaming members.
It's obvious why Netflix's member growth trends are so important. Without any advertising on its platform, and considering that Netflix's DVD business has dwindled to represent just 2% of revenue, Netflix's business is almost entirely dependent on its monthly streaming members. With that said, here's an update on Netflix's latest metrics on its streaming members.
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Still growing rapidly
When Netflix surpassed 100 million streaming members in its second quarter last year, it might have been tempting for some onlookers to conclude that the low-hanging fruit may have been mostly snapped up, and that growth would inevitably slow over the next 12 months. But members have continued to grow rapidly.
In fact, Netflix added significantly more members over the 12 months ending September 30, 2018, than it did in the period ending September 30, 2017. For the more recent 12-month period ending with Netflix's third quarter, the streaming-TV giant added about 28 million streaming members. During the year-ago timeframe, Netflix added approximately 23 members.
This puts Netflix's total streaming members at an impressive 137.1 million -- up from 109.3 million in the year-ago quarter.
Excluding free membership trials, Netflix's growth in paid members is just as impressive. The company ended Q3 with 130.4 million paid members, up from 104.0 million paid members in the year-ago quarter.
More growth ahead
The trends behind Netflix's member growth paint an optimistic picture for what to expect from streaming member trends over the next year. Consider Netflix's third quarter: U.S. streaming member additions were 1.1 million -- up from 0.9 million in the year-ago quarter. Meanwhile, international net streaming member additions also increased, rising from 4.5 million net additions in the year-ago quarter to 5.9 million in the third quarter of 2018.
Similarly, Netflix guided for some monstrous growth in members for its fourth quarter. The company said it expected to add 9.4 million members during the holiday period -- up from 8.3 million member additions in the fourth quarter of 2017.
Looking further out, management believes its U.S. streaming members rise to as many as 90 million members -- up from 60 million today. And the company has particularly big ambitions abroad. Not only is the 22 million members Netflix added internationally over the last 12 months indicative of the momentum the company is seeing outside of the U.S., but the company believes it's only tapping the surface in some key international markets. Indeed, Netflix CEO Reed Hastings has said he thinks the company can garner 100 million members in India alone.
