Squid Game Craze Lifts Netflix’s Quarter With Over 4 Million New Subscribers

Netflix’s global sensation Squid Game has helped attract more new customers than expected, the world’s biggest streaming service said on Tuesday, predicting that a full lineup would further boost signups through the end of the year.

After a sharp slowdown in the first half of 2021, Netflix added 4.38 million subscribers from July to September to reach 213.6 million worldwide. Wall Street analysts had forecast 3.86 million additions, according to Refinitiv data.

Netflix experienced a subscriber boom last year as COVID-19 kept audiences at home, but growth stalled earlier this year. At the same time, Walt Disney’s Disney+, AT&T’s HBO Max and other competitors have beefed up their offerings. Netflix blamed the earlier weakness in part on a thin slate of new shows caused by production shutdowns due to the pandemic.

Then, South Korean drama Squid Game debuted on September 17 and surprised executives by becoming the streaming service’s most-watched original series in its first month. On Tuesday, Netflix said a “breathtaking” 142 million households had watched the dark drama about people competing in a deadly competition to erase financial debt.

The series, made on a relatively shoestring budget, topped Netflix’s viewing charts in 94 countries, boosted sales of Vans tracksuits and sneakers, and sparked interest in learning Korean. Squid Game merchandise is now on its way to retailers. , said Netflix.

The fervor around Squid Game is also expected to increase in the current quarter. Netflix predicted it would attract 8.5 million new customers by the end of the year, ahead of industry forecasts of 8.33 million, as it releases a wide range of new shows. Upcoming debuts include big-budget action movie Red Notice and a second season of fantasy drama The Witcher.

It also expects more standardized programming in 2022 spread throughout the year, “assuming there are no new waves of COVID or unforeseen events,” the company said in a statement. quarterly letter to shareholders.

Shares of Netflix were close to even in after-hours trading at $641 (around Rs 48,130) after the earnings report.

Overseas growth

Most of the new customer pickups in the quarter came from the Asia-Pacific market, where Netflix now has 30 million subscribers. Industry experts believe the region could rival the United States and Canada – Netflix’s biggest market – within three to five years, said Joe McCormack, senior analyst at Third Bridge.

Netflix is ​​trying new ways to attract customers overseas, including offering a free plan in Kenya. It will take one to two years to find out if this tactic leads to more paying subscribers, the company said.

For the quarter that ended in September, diluted earnings per share came in at $3.19 (about Rs.240), beating analysts’ expectations of $2.57 (about Rs.190). Revenue rose 16% to $7.5 billion (about Rs 56,325 crore).

Prior to the earnings report, Netflix shares had risen about 22% this year and were trading at record highs, but their gains lagged the Nasdaq’s 54% rise.

Netflix, which keeps much of its viewership data secret, also said it would release information more frequently and move its primary publicly reported metric to hours watched, rather than the number of accounts that watched a title. for at least 2 minutes. The company noted that it competes with a wide range of activities beyond TV, including TikTok and Fortnite. When Facebook suffered a global outage in early October, “our engagement grew 14% during that time,” Netflix said.

Executives have not responded to workers’ complaints about a Dave Chappelle comedy special, which the company has previously defended. Some employees say Chappelle made comments harmful to transgender people, and they are planning a walkout on Wednesday.

© Thomson Reuters 2021

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