Netflix reported billion-dollar profits and booming subscriber growth on Tuesday that beat forecasts as global hits like Squid Game drew viewers in droves.
Analysts were worried that a surge in Netflix subscriptions during pandemic lockdowns would be followed by a plunge as the world opened back up. But the streaming entertainment platform said that in the third quarter it made a profit of 1.45 billion dollars on revenue that grew 16% to 7.5 billion dollars in that period.
Subscribers jumped by 4.4 million, double the growth that was seen in the same quarter in 2020, allowing the platform to end the period with 214 million worldwide.
After rolling out a lighter-than-normal slate of content in the first half of this year due to Covid-related production delays, Netflix said it was finishing the year with “what we expect to be our strongest Q4 content offering yet”.
“Our programming strategy is to provide members with a wide variety of high-quality content that’s loved and watched in large numbers”.
New seasons of the original Netflix series, ‘Money Heist’ and ‘Sex Education’ were the biggest returning shows, viewed by 69 million and 55 million subscribers respectively, according to the Silicon Valley powerhouse.
Free speech controversy
Squid Game has become Netflix’s biggest show ever, watched by a “mind-boggling” 142 million households in the four weeks after its release in mid-September, executives disclosed.
“The breadth of Squid Game’s popularity is truly amazing; this show has been ranked as our #1 program in 94 countries”.
Squid Game-themed products are on their way to retail outlets, Netflix announced to investors.
Most of the subscriber growth in the quarter came from the Asia-Pacific region, which accounted for 2.2 million added Netflix members.
Joe McCormack, senior analyst at Third Bridge, pointed to the power of the ‘Squid Game’ phenomenon.
“Squid Game was Netflix’s recent example of generating a global hit, with two-thirds of the company’s total subscribers viewing the series in the first four weeks”.
However, Netflix has also been plunged into America’s culture wars by a Dave Chappelle comedy special that raises concerns about free speech and censorship but has been slammed by its own employees as transphobic.
In ‘The Closer’, boundary-pushing mega-star, Chappelle responded to critics who have accused him of mocking transgender people in the past by asserting that “gender is a fact” and accusing LGBTQ people of being “too sensitive”.
“In our country, you can shoot and kill” a Black man, “but you’d better not hurt a gay person’s feelings”, said the stand-up comic, who is Black.
While the show has been condemned by LGBTQ groups, including GLAAD, which cited studies linking stereotypes about minorities to real-world harm, Netflix has so far stood firm, insisting the show will not be taken down.
But the streaming giant finds itself trapped at the center of arguably its most intense controversy currently.
Chappelle remains hugely popular, at a time when Netflix is competing with rivals such as HBO and Disney in the so-called streaming wars. Executives said in the letter.
“We compete with a staggeringly large set of activities for consumers’ time and attention like watching linear TV, reading a book, browsing TikTok, or playing Fortnite, to name just a few”.
They noted that engagement at Netflix climbed 14 percent during the hours Facebook was hit with a major outage early this month.
Netflix also mentioned it is continuing to push into gaming, focusing on mobile devices first, in a methodical approach expected to take years to bear meaningful fruit. Netflix chief Reed Hastings said:
“Imagine three years from now some future Squid Game is launching and it comes along with an incredible array of interactive or gaming options that are all built into the service. 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”.
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