Netflix added almost 7M subscribers last quarter (and is targeting your TV time)
Snacks / Thursday, October 17, 2019
100% of investors should have liked this... Netflix shares surged 10% after releasing its 3rd quarter earnings report. That's better than the previous quarter, when the stock dropped by the same amount. Get a comfy seat on the couch and let's compare:
- Q2 (Apr – Jun): 2.7M new subscribers.
- Q3 (July – Oct): 6.8M new subscribers.
The reason's in the seasons... CEO Reed Hastings explained away Q2's weakness by blaming the new shows, which were duds. But in Q3, all eyeballs were on Netflix's seasons on seasons of new content.
- Bingeable in the USA: "Stranger Things" Season 3 set a Netflix record 64M households tuning in the first 4 weeks after its July launch. And 32M checked out "Unbelievable."
- Bingeable abroad: Since 98% of subscriber growth the past 6 months has been international, Netflix invested in non-English hits like "The House of Paper" (about a Spanish heist) and "The Naked Director" (about a Japanese porn director). "Terrace House" is our personal fave. 130 seasons of non-English content hit in 2020.
Netflix is above the streaming wars... A "benchmark" is the standard you compare your performance to (for LeBron, it's Jordan. For Beyoncé, it's Madonna). Netflix prefers to benchmark itself against old-school cable TV.
- Netflix has over twice as many paying subscribers (158M) as rival Hulu (76M).
- But it gets just 10% as much viewing as old school American TV.
- So although it's miles ahead of streaming competition, it's miles behind TV — and it thinks all this streaming competition will just accelerate cord-cutting.
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