Netflix reported sharply increased third-quarter earnings Tuesday due to a stronger slate, which includes “Squid Game,” a South Korean survival drama that Netflix claims was its largest-ever TV series.
After suffering from delays caused by the pandemic in the first half, the company has increased production. It is also looking beyond TV and movies, and stated that it will fund “new growth opportunities”, such as videogames. These are currently being tested in certain markets.
The company stated that it is still early days for the initiative. “We plan to experiment with different types of games, learn more from our members, and improve our game library,” they said.
Netflix is working hard to increase its international subscribers, even as it faces saturation on the U.S. markets. In Kenya, Netflix launched a free mobile service, which it hopes will encourage more people to sign up for paid memberships.
Netflix reported that its subscriber base increased 9% to 213.6 Million, surpassing its projections.
The increase occurred even though Netflix’s Latin America subscriber growth slowed “a bit” after the company raised prices in Brazil, Spencer Neumann (Nielsen’s chief financial officer) said in a conference call.
He said, “It’s not a long-term slowdown in our growth, but it’s good for our business. We’re already continuing to expand through it.”
Netflix’s latest quarter saw them earn $1.45 billion or $3.19 per share. This is an increase of $789.9million or $1.79 per Share, which was the same as a year ago.
From $6.44 billion, revenue grew by 16% to $7.48 Billion.
According to FactSet, analysts were expecting earnings of $2.56 per Share on revenues of $7.48 Billion.
After-hours trading saw shares of the Los Gatos-based company fall by about 1%
On Tuesday, Netflix announced that it would change the way it reports viewership metrics. Netflix will no longer report how many people have viewed its titles. Instead, it will report how many hours they were viewed. Netflix stated that this is a “slightly better indicator” of the success of its titles and member satisfaction.
Netflix stated that it also matches the measurement of TV viewing by outside services and gives credit for rewatching.
Netflix stated that it expected to add 8.5 Million net subscribers in the current quarter.
In its earnings news release and call of , the company did not mention the controversy surrounding the recent Dave Chapelle special that premiered just a few days after the end of the third quarter.
Netflix announced Friday that it fired an employee after disclosing financial information regarding the payment for “The Closer” by Chappelle. Employees and advocacy groups denounced it as transphobic and dangerous to transgender persons.
Netflix stated that the employee was not named and shared “confidential commercially sensitive information” outside of the company.
GLAAD, a media watchdog, stated that Netflix’s policy of rejecting programs that incite hatred or violence violates its policies.
In an internal memo, Ted Sarandos, Netflix’s co-CEO, stated to managers that the show does not cross the “line on hate” and will continue to stream on the streaming site.
Transgender workers and their allies plan to protest Wednesday’s walkout.