Squid Game propels Netflix past 213MN global subs at end of Q3 | Major Businesses | Business | News | Rapid TV News
By continuing to use this site you consent to the use of cookies on your device as described in our privacy policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. [Close]
Even though the rate of global paid net additions to the subscription video-on-demand service has fallen to its lowest level since 2017, Netflix has added over 4 million customers in its third quarter of 2021 driven by cult Korean series Squid Game which is now its most popular programme.
korean Netflix multiple device collage 20OCt2021
For its third quarter ended 30 September 2021, Netflix said that after a lighter-than-normal content slate in Q1 and Q2 due to Covid-related production delays in 2020, it was able to see the benefit of a stronger slate in the second half of the year. In the third quarter the company grew revenue 16% year-on-year to $7.5 billion, with operating income rising on an annual basis by 33% compared with the quarter a year ago to $1.8 billion. The company added 4.4 million paid customers during the quarter, double those in the same quarter a year ago, to end with 213.56 million paid memberships. For the second consecutive quarter, the APAC region was Netflix’s largest contributor to membership growth with 2.2 million paid net adds. In EMEA, paid net adds of 1.8 million improved sequentially vs. the 188k in Q2 as several titles had a particularly strong impact.

The rising memberships were the engine for 9% annual revenue growth in Q3, totalling $7.483 billion, up 16% compared with Q3 2020. Net income was $1.449 billion. These revenues were boosted by a 9% and 7% increase in average paid streaming memberships and ARM, respectively. Excluding a foreign exchange (FX) impact of over $128 million, ARM rose 5% year-on-year while operating margin for Q3 amounted to 23.5%, a three-percentage point increase compared with the year ago period.

A key driver for the financial growth was the increased content drive. Season five of La Casa de Papel (Money Heist) and season three of Sex Education were two of Netflix’s biggest returning shows in the quarter with 69 million and 55 million member households, respectively, choosing to watch these in the first four weeks of the quarter. On the heels of The Queen’s Gambit, Netflix had another limited series hit with Maid which launched on 1 October 2021. Netflix is now producing local TV and film in approximately 45 countries and have built deep relationships with creative communities around the world.

Yet the stand out in Q3 and many more quarters ahead was Squid Game. Released on 17 September it has become Netflix’s biggest TV show ever with 142 million member households globally watching in its first four weeks. The show has been ranked as Netflix’s leading programme in 94 countries including the US. It has also a cultural leader drawing more than 42 billion views on TikTok.

Going forward, Netflix predicted in its third quarter results that for Q4 it will have net adds of 8.5 million, consistent with Q4’20 paid net additions. For the full year 2021, it forecasts an operating margin of 20% or slightly better and for Q4 an operating margin of approximately 6.5% compared with 14% in Q4’20. The year-on-year decline in operating margin is said to be due mostly to the company’s backloaded big content release schedule in this Q4, which will result in a roughly 19% annual increase in content amortisation for Q4., compared with 8% year to date.