July 20, 2021
Netflix July 20 reported it added 1.54 million subscribers worldwide for the second quarter, ended June 30. The count beat company expectations of 1 million, but still tracked the smallest quarterly gain in the streaming video era. The service added 10 million subs in the previous-year period. Netflix lost 430,000 net subs in the U.S. and Canada, after adding 2.94 million last year.
The service ended the quarter with 209.1 million subscribers worldwide, up from 192.9 million subs in the previous-year period.
“We believe our large membership base in [North America] coupled with a seasonally smaller quarter for acquisition is the main reason for this dynamic,” co-CEOs Reed Hastings and Ted Sarandos and CFO Spencer Neumann wrote in the shareholder letter.
They said the pandemic created unusual choppiness in the streamer’s growth and significantly distorted year-over-year comparisons as acquisition and engagement per member household spiked in the early months of the pandemic.
“In Q2 ’21, our engagement per member household was, as expected, down vs. those unprecedented levels, but was still up 17% compared with a more comparable Q2 ’19 period, demonstrating how much our members value Netflix and that as we improve our service we can charge a bit more,” they wrote.
Netflix original movies continue to register with subscribers. Zack Snyder’s Army of the Dead generated a record 75 million member households in its first 28 days of release. As an extension to Army of the Dead, a prequel, Army of Thieves, will be released in Q4 ’21, along with a spinoff anime series later in 2022. Fatherhood, a dramedy starring Kevin Hart, was another hit, drawing an estimated 74 million member households in its first 28 days.
Netflix tracks a viewer after 120 consecutive seconds of streaming.
The quarter also featured Netflix’s most-watched animated film to date with 53 million member households streaming The Mitchells vs. The Machines.
The platform’s ongoing foray into original episodic programming continues to bare fruit, with the streamer citing the launch of “Shadow and Bone,” a fantasy series based on the popular Grishaverse book series, generating 55 million subscriber households in its first 28 days of release. The show has been renewed for a second season. Separately, “Sweet Tooth,” based on the beloved DC comic, was another hit series with 60 million member households streaming title in its first four weeks.
Management said the streamer’s move into nonfiction series is going well. Standout unscripted titles included season two of dating show “Too Hot to Handle” and social experiment reality program “The Circle,” which saw an estimated 29 million and 14 million households, respectively, in the first 28 days. True crime docuseries “The Sons of Sam” generated 19 million households.
“We’re building out some of these unscripted titles with local versions of the same formats,” Hastings & Co. wrote. “As one example, ‘Too Hot to Handle: Brazil’ and ‘Too Hot to Handle: Latino’ will be launching later in July and September, respectively, to serve our [Latin America] region.”
Finally, Netflix generated $96 million in revenue from its legacy by-mail disc rental service through six months of the fiscal year. That’s less than half the $239 million Netflix generated renting DVD and Blu-ray Disc movies throughout 2020.