Netflix beats subscriber estimates following success of "Squid Game"
- Sara Fischer, author of Axios Media Trends
Illustration: Rebecca Zisser/Axios
Netflix on Thursday said it added 4.4 million subscribers globally last quarter, which not only beat Wall Street expectations, but also marked the first time that the company reported positive subscriber gains in the past six months.
Why it matters: The tech giant credits a more normalized content release schedule last quarter for the gains. It blamed subscriber slowdowns during the past two quarters on COVID-related production delays.
Details: The company credited increased investments in foreign programming for user engagement gains, beginning with "La Casa de Papel" and more recently with its mega-hit "Squid Game."
- Squid Game has been ranked Netflix's top program in 94 countries. The company said 142 million member households globally watched the title in its first four weeks, a stat it called "mind-boggling" in a letter to shareholders.
Between the lines: The company said later this year, it will switch the metric it uses to describe engagement with its shows from the number of accounts that watched them to the number of hours viewed.
- The tech giant says that it thinks this is a better indicator of overall success of its titles and it "also matches how outside services measure TV viewing and gives proper credit to rewatching."
- The company said it will also begin to more regularly release title metrics outside of its earnings report so that people could get a better sense of how Netflix titles perform in real-time, similar to television ratings.
By the numbers, per CNBC:
- Earnings per share (EPS): $3.19 vs $2.56 according to Refinitiv survey of analysts
- Revenue: $7.48 billion vs $7.48 billion, according to Refinitiv
- Global paid net subscriber additions: 4.4 million vs 3.84 million, according to StreetAccount
What to watch: The company continues to face a saturated streaming market in the U.S. and will need to look abroad to continue adding more subscribers. Netflix said that Asia Pacific region was its largest contributor to membership growth last quarter.
Go deeper ... Netflix's earnings over the past year: