Global interest in Netflix’s Korean thriller Squid Game lured more new customers than expected in the recent quarter, boosting shares of the world’s largest streaming service by 3 per cent on Tuesday.
After a sharp slowdown in the first half of the year, Netflix added 4.38 million subscribers from July through September to reach a worldwide total of 213.6 million. Wall Street analysts had projected 3.86 million new customers, according to Refinitiv data.
Netflix enjoyed a subscriber boom last year as COVID-19 kept audiences at home, but growth stalled in the first half of 2021. At the same time, competitors including Walt Disney Co’s Disney+ and AT&T Inc’s HBO Max have bolstered their offerings. Netflix partly blamed this year’s early weakness on a thin slate of new programming caused by production shutdowns during the pandemic.
Then, Squid Game debuted on Sep 17 and surprised executives by becoming the streaming service’s most-watched original series in its first month, according to the company.
The dark drama tells the story of people who compete in a deadly competition to erase financial debt. The series has topped Netflix viewing charts in multiple countries, kick-started sales of track suits and Vans sneakers, and kindled interest in learning Korean.
Excitement around “Squid Game” also is expected to boost the current quarter. Netflix projected it will pick up 8.5 million new customers by year’s end, ahead of industry forecasts of 8.33 million, as the pace of new releases accelerates. Upcoming debuts include big-budget action flick Red Notice and a second season of fantasy drama The Witcher.
For the quarter that ended in September, diluted earnings-per-share came in at US$3.19. Revenue rose 16 per cent to US$7.5 billion.
Before the earnings report, Netflix shares had risen roughly 22 per cent this year and were trading near record highs, but their gains lag behind the 54 per cent increase in the Nasdaq.
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