Netflix Reports Jump in Users, Calls ‘Squid Game’ Its Most Popular Show Ever
Streaming service adds roughly 4.4 million subscribers amid increased competition and the typical summer slowdown
A scene from the popular Netflix series ‘Squid Game,’ which Netflix says is the No. 1 program in 94 countries.PHOTO: YOUNGKYU PARK/NETFLIX/ASSOCIATED PRESS
Updated Oct. 19, 2021 7:20 pm ET
Netflix Inc. NFLX 0.16% added 4.4 million memberships in the third quarter, more than the company had forecast, as viewers flocked to the streaming platform with the return of popular series and new hits such as “ Squid Game.”
The new additions bring Netflix’s total paid global subscriber base to 213.6 million. The company had forecast that it would add 3.5 million memberships in the three-month period.
Typically, the summer months tend to be slower in regards to subscriber additions. In last year’s third quarter, Netflix added 2.2 million subscribers, just missing expectations. At that time, the company said the big gains in subscribers it had seen during the Covid-19 lockdown were beginning to wane.
In recent weeks, Netflix has benefited from the success of “Squid Game,” the South Korean dystopian drama that made its debut on Sept. 17 and quickly became a global phenomenon. The series has gone viral with social platforms like TikTok showing videos of people replicating the children’s games, while online retailers are rushing to sell “Squid Game” Halloween costumes.
In its letter to investors, Netflix said “Squid Game” has become its most popular show ever, with 142 million households sampling the title. It is the No. 1 program in 94 countries, it said.
Noting that “Squid Game” creator Hwang Dong-hyuk had tried for several years to get the show made before Netflix grabbed it, Co-Chief Executive and Chief Content Officer Ted Sarandos said, “Our team recognized something no one else did and created an environment for that creator to make a great show.”
Movies that performed well include “Sweet Girl” starring Jason Momoa and “The Kissing Booth 3,” the company said.
Netflix is also projecting a strong fourth quarter in terms of content with the return of the dark drama “You” and “Cobra Kai,” the popular series that is a sequel of sorts to the “Karate Kid” movie franchise. The major movies Netflix will drop in the coming months include “Red Notice” with Dwayne Johnson, Ryan Reynolds and Gal Gadot and the Leonardo DiCaprio and Jennifer Lawrence film “Don’t Look Up.”
“We have so much content coming in Q4 like we’ve never had,” said Netflix Chairman and Co-CEO Reed Hastings, who was sporting a “Squid Game” warm-up jacket during the company’s video call to discuss its results.
The Asia Pacific region was among the company’s strongest in terms of new members, responsible for half of the additions in the quarter, adding 2.2 million subscribers to the total tally.
Netflix is projecting a strong fourth quarter in terms of content with the return of the dark drama ‘You.’PHOTO: NETFLIX
In the U.S. and Canada, Netflix ended the third quarter with 74.02 million subscribers, an improvement of 73,000 from the end of the second quarter. Competition in the U.S. in particular has grown rapidly over the past few years as rivals including Walt Disney Co. DIS 0.02% ’s Disney+, AT&T Inc.’s T 1.03% HBOMax and Amazon.com Inc.’s AMZN -0.08% Prime Video continue to make inroads.
Netflix also said it would change how it discloses viewership information. It currently reports on the number of accounts that watched at least two minutes of a show. Going forward, it will instead pivot to hours viewed for its titles.
Netflix earlier this year said it would make its own videogames, part of an effort to expand into new revenue streams. The company said the games would be made for mobile devices, and some of them may feature characters from Netflix shows and movies. The games will be included at no extra cost to Netflix members.
“We’ve begun testing our games offering in select countries,” Netflix said in its shareholder letter. “It remains very early days for this initiative and, like other content categories we’ve expanded into, we plan to try different types of games, learn from our members and improve our game library.”
In the third quarter, Netflix acquired videogame company Night School Studio, whose products include “Oxenfree.” Netflix said the purchase will help it build its development capabilities.
Earlier this month, Netflix also teamed up with Walmart Inc. WMT 2.12% to create a digital storefront on the retailer’s website that will sell merchandise tied to hit shows such as “Stranger Things” and “Squid Game.” The deal with Walmart creates a dedicated area of Walmart.com for Netflix merchandise, the Netflix, marking the first such online storefront that Netflix has created with a national retailer.
Netflix has also expanded its exclusive content with the purchase of the Road Dahl catalog, adding popular titles such as “Charlie and the Chocolate Factory” and “Matilda” to its stable.
While Netflix is benefiting from the popularity of its programming, one of its new pieces of original content has created headaches internally.