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Netflix added 4.4 million new subscribers in the third quarter of 2021 for a total of 214 million paid subscribers, topping the company’s modest projections set last quarter for a net subscriber add of 3.5 million.
The Asia-Pacific region proved to be the largest contributor to Netflix’s subscriber growth, with the region accounting for more than half, or 2.2 million, of the quarter’s net subscriber adds, according to a shareholder letter released on Tuesday. Europe, the Middle East and Africa contributed 1.8 million subscribers for the quarter. In Latin America, Netflix added around 300,000, while U.S./Canada accounted for roughly 70,000 new paid subscribers, bouncing back from last quarter’s loss of around 400,000 subscribers.
In Q2, the company saw its total subscriber base increase by 1.5 million. In Q1, the company failed to meet its projections, adding 4 million new subscribers — 2 million short of its expectation of 6 million. For Q4, the streamer is projecting a net add of 8.5 million subscribers — a marked increase from its performance thus far in 2021. Netflix has had a lackluster year for subscriber growth, though hit shows like Squid Game arriving at the end of the third quarter may speak to the “backweighted” 2021 slate that Netflix co-CEO and chief content officer Ted Sarandos referenced during the company’s Q2 earnings call.
Revenue in Q3 hit $7.5 billion, representing a 16 percent year-over-year growth and a slight increase from Q2’s reported $7.3 billion in revenue. Average revenue per user in the U.S. and Canada saw a slight increase in Q3, hitting $14.68.
The streaming giant isn’t limiting its ambitions to just shows and films, and Q3 proved to be an eventful quarter for Netflix acquisitions. Earlier in October, Netflix partnered with Walmart for a merchandising deal that will bring customers clothes, toys and other goods linked to popular Netflix shows. Last month, the streamer also acquired the Roald Dahl Story Company, with plans to create a “unique universe” based on the author’s much-loved stories like Charlie and the Chocolate Factory, Matilda, The BFG and Fantastic Mr. Fox. And on the heels of its Dahl deal, Netflix announced it had acquired the indie game developer behind Oxenfree, Night School Studio, as it continues its expansion into video games.
During a pre-taped interview for investors, Netflix’s chief product officer, Greg Peters, hedged that the company is still “incredibly early” in its mobile gaming expansion and noted that the streamer won’t be going on a “buying spree” for indie game developers, despite its recent acquisition of Night School Studio.
But Netflix co-CEO Reed Hastings said the streamer is hoping to eventually surpass Disney in creating a “spectacular all-around experience” for users.
“A company like Disney is still ahead of us in some of those dimensions of putting that whole experience together, but boy are we making progress, and it’s so exciting, over the next 3-5 years, [we’re] kind of closing that gap and hope to pass them on that spectacular all-around experience,” Hastings said.
But in the meantime, Netflix may be losing some of its dominance in the streaming TV viewing market. According to Nielsen, Netflix and YouTube are now tied, with both accounting for 6 percent of all TV viewing in September. (In June, Netflix accounted for 7 percent of viewing, while YouTube made up 6 percent.)
Tuesday’s earnings also come during a period of unusual turmoil for the company, which is facing internal and public pushback from employees and viewers for its handling of Dave Chappelle’s latest comedy special, The Closer. On Wednesday, multiple trans Netflix staffers and allies are expected to participate in a virtual walkout to protest Sarandos’ defense of Chappelle and present a letter of demands to Sarandos. The walkout, in which participating staffers will refrain from doing any work for Netflix, will also coincide with a public rally, organized by the activist Ashlee Marie Preston, on Wednesday morning outside of Netflix’s building on Sunset Blvd.
According to a copy of the letter set to be presented to Sarandos and obtained by The Verge, Netflix’s trans employee resource group is asking Netflix to create a fund for non-binary and trans talent, revise internal processes for reviewing potentially harmful content, add disclaimers on shows with transphobic content and acknowledge the harm Netflix has caused to the trans community, and particularly the Black trans community, among other requests.
The Netflix executives on Tuesday’s earnings interview did not address the Chappelle controversy or upcoming walkout.
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