Netflix said it would change the way it measures viewership as it confirmed in third-quarter results that the South Korean TV phenom Squid Game drew 142 million subscriber households in its first month to become the service’s biggest show to date.
The show debuted on September 17 and charted at number one in 97 territories, including the United States. In its third quarter letter to shareholders on Tuesday, October 19, Netflix said later in the year that it would transition to reporting hours watched from its current metric which records the number of accounts that have watched. at least two minutes of a piece of content in its first 28 days on the platform.
“[W]We believe that engagement as measured by hours watched is a slightly better indicator of the overall success of our titles and member satisfaction,” the company said. “It also aligns with how outside services measure TV viewing and give appropriate credit to re-watching. Additionally, we will begin publishing title metrics more regularly outside of our revenue report. so that our members and the industry can better measure success in the world of streaming.
Per hours watched Susanne Bier’s horror film Bird Box with Sandra Bullock exceeds Chris Hemsworth’s action thriller Extraction over 282m to become Netflix’s most-watched film, ahead of Extraction over 231m. Next is the Irish for 215m, then The Kissing Booth 2 over 209m, and 6 Underground over 205m.
By accounts viewed Extraction was the 99m champion, followed by Bird Box on 89m, Spenser Confidential over 85m, 6 Underground and Murder Mystery over 83m each.
As for TV shows, Bridgerton: Season 1 is the first title in hours seen on 625m, followed by Money Heist: Part 4 on 619m, stranger things 3 on 582m, The Witcher: Season 1 over 541m, and 12 Reasons Why: Season 2 over 496m. Bridgerton was still the champion in 82m counts seen, followed by Lupine: Part 1 over 76m and The Witcher: Season 1 over 76m. Tied for fourth and fifth were Sex/Life: Season 1 and stranger things 3 over 67m.
Overall, the streamer beat its forecast and added 4.38 million net paid subscribers to reach 213.56 million members worldwide in Q3, as revenue grew 16.3% to 7 .48 billion and operating profit increased 33% to $1.8 billion year-on-year. Netflix forecasts an increase of 8.5 million global net paid subscriptions in the fourth quarter to 222 million. Earnings per share rose 83% and beat forecast to $3.19. Shares of Netflix fell 1.4% after hours.
For the second consecutive quarter, Asia-Pacific was the top membership driver with 2.2 million paid net additions. In Europe, the Middle East and Africa, there were 1.8 million paid net adds. Despite slower growth in the United States, Canada – which produced an increase of 70,000 – and Latin America, the company said there was still “wide avenue for growth”.
Netflix has experimented with a free plan for Android mobile phone users in Kenya in hopes of enticing them to pay for a subscription. The company said it had started testing games in select countries and said these would be included in the monthly subscription and would not feature ads or in-app purchases so the game could be focused “on pleasure rather than monetization”.
The results followed a slow second quarter impacted by Covid-related production delays and the company promised what it expected to be its best fourth-quarter content offering yet. They include the title of the action red notice with Dwayne Johnson, Gal Gadot and Ryan Reynolds; The prospect of Adam McKay’s awards Don’t look up with Leonardo DiCaprio and Jennifer Lawrence; The recent opening of Jeymes Samuel’s BFI London Film Festival The more they fall with Idris Elba and Regina King; Drama by Sandra Bullock the Unforgivable; and Zack Snyder’s zombie prequel army of thieves.
Fourth Quarter Film Offering Features Trio of Venice Awards: Jane Campion’s The power of the dog with Benedict Cumberbatch, Jesse Plemons and Kristen Dunst; by Maggie Gyllenhaal The lost girl with Olivia Colman; and Paolo Sorrentino God’s hand.
As for 2022, the company was anticipating a “more normalized slate of content in 2022” with a higher number of originals compared to 2021 and a more even distribution over the year – assuming there are no no new waves of Covid or unforeseen events that cause large-scale production shutdowns.
Unsurprisingly, the company’s co-CEO Ted Sarandos’ controversial endorsement of comedian Dave Chappelle’s transphobic and homophobic comments in his latest stand-up special the Closer did not appear in the letter to shareholders or the post-report live session with executives and analysts. Netflix employees are planning a walkout at the company’s Los Angeles headquarters tomorrow (Wednesday, October 20).
In interviews with US Traders on Tuesday evening, Sarandos admitted that he had “messed up” internal communications with staff about it and agreed that the storytelling had real-world impact, but that he was stuck to the show.