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Netflix to report viewing times as new rating metric in big change

Netflix touted top “Squid Game” audience statistics, laid out its video game plans, and wowed Wall Street on Tuesday.

Netflix posted positive results in its third quarter 2021 earnings report on Tuesday, including strong growth in subscriber numbers that exceeded analysts’ expectations.

The company reported 4.4 million net paying subscriber additions globally, far exceeding estimates of 3.84 million, according to StreetAccount data obtained by CNBC. The company’s revenue of $ 7.48 billion lived up to expectations, while its earnings per share of $ 3.19 exceeded analysts’ expectations of $ 2.56. The good numbers served as a reversal of fortunes for Netflix, which performed poorly in its first and second quarter results. Netflix stock was largely unchanged at the time of going to press, but has been trending steadily upward since August.

Much of Netflix’s third-quarter subscriber growth came from Asia Pacific (APAC) countries: 2.2 million of net paid subscriber additions (half of total paid net additions) came from the APAC region, while 1.8 million additions came from Europe, the Middle East, and Africa. The company noted that its subscriber growth in the United States was slower than in other regions. Netflix said it has reached a total of 214 million subscribers worldwide.

Netflix’s strong growth in non-US markets is why the company has consistently touted its international programming in its earnings reports over the past few years. The company noted that “La Casa de Papel” in Spanish (aka “Money Heist”) was its biggest comeback show of the quarter, with 69 million views from member households. Netflix’s main non-US-language hit is “Squid Game,” a Korean-language drama that aired on September 17th. Netflix defended the show’s popularity in its letter to shareholders and claimed that 142 million member households chose to watch the title within four weeks of its premiere and said the show was its highest ranked title in 94. countries, including the United States.

While Netflix has been releasing its “Squid Game” audience statistics widely for several weeks, the company has declared its intention to change the way it shares audience metrics with audiences by the end of the year. . In 2020, Netflix began tracking audiences based on accounts that watched a given program for at least two minutes – therefore, a subscriber would be counted as a viewer for an entire series even if that person had never watched. more than two minutes of a program. By 2022, the company will report how many hours a given program has watched, rather than how many viewers have started watching it. The company also promised to publish audience information “more regularly, outside of our earnings report.”

No major US streaming service regularly publishes transparent audience data, but Netflix’s audience ratings have been a particular source of controversy in the journalism and entertainment industries for several years. It’s unclear how often Netflix will start sharing audience data in the future, but the company said in its Q3 report that it will start posting data more regularly.

“Later in the year, we’ll switch to a report on the hours watched for our titles rather than the number of accounts that choose to watch them,” Netflix representatives said in the company’s earnings report. “There is some difference in rankings, as you see below, but we think engagement measured in hours viewed is a slightly better indicator of our titles’ overall success and member satisfaction. It is also consistent with how external services measure television viewing and assign appropriate credit to re-viewing. Additionally, we will begin to publish title metrics more regularly outside of our revenue report so that our members and the industry can better measure success in the streaming world.

Netflix also provided new details on its video game initiatives, which the company first mentioned in its summer earnings report. The company noted that it acquired developer “Oxenfree” Night School Studio during the quarter, reiterated that the games will be included in its members’ subscriptions, and said its games will not contain in-game ads or in-app purchases. Netflix has said it has started testing games in various countries, but it is not known when the company’s gaming initiatives will debut in the United States.

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