Netflix posted sharply higher third-quarter earnings Tuesday thanks to a stronger slate of titles, including Squid Game, the dystopian survival drama from South Korea that the company says became its biggest-ever TV show.
The company has ramped up production, rebounding from pandemic-induced delays in the first half of the year. It’s also looking beyond movies and TV and said it plans to fund “new growth opportunities,” such as video games, which are being tested in some markets.
“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,” the company said.
And as it faces saturation in the U.S. market, Netflix is focusing on growing its international subscriber numbers. For instance, it launched a free mobile plan in Kenya in the hopes it will get more people in the country to sign up for paid memberships.
In all, Netflix said its subscriber base grew nine per cent from a year earlier, to 213.6 million, surpassing its own projections.
Netflix earned $1.45 billion US, or $3.19 per share, in the latest quarter. That’s up from $789.9 million or $1.79 per share, a year earlier.
Revenue grew 16 per cent to $7.48 billion from $6.44 billion.
Netflix also said Tuesday that later this year, it will change how it reports its viewership metrics. Instead of how many accounts stream its titles, it will report the number of hours viewed. Netflix said this is a “‘slightly better indicator of the overall success of our titles and member satisfaction.”
“It also matches how outside services measure TV viewing and gives proper credit to rewatching,” Netflix said.
Fallout from Chappelle special
The company made no mention in its earnings press release of the fallout surrounding a recent Dave Chapelle comedy special, which premiered earlier this month after the third quarter ended.
Netflix said Friday that it had fired an employee for disclosing confidential financial information about what it paid for the special, The Closer, whose content employees and advocacy groups condemned as being transphobic and harmful to transgender people.
The employee, who wasn’t named, shared “confidential, commercially sensitive information outside the company,” a Netflix statement said.
The media watchdog group GLAAD said that “anti-LGBTQ content” violates Netflix’s policy to reject programs that incite hate or violence.
However, Netflix co-CEO Ted Sarandos told managers in an internal memo that the show doesn’t cross “the line on hate” and will remain on the streaming service.
Transgender employees and their allies are planning to stage a walkout Wednesday in protest.
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