Netflix: ‘Outside the Wire’ Streamed by 66 Million Subs in Q1

Netflix’s android-themed war actioner Outside the Wire, co-starring Anthony Mackie and Damson Idris, was streamed by more than 66 million subscribers in the first 28 days in the quarter — leading all of the SVOD pioneer’s original programming debuts. Netflix counts a view after 120 seconds of streaming.

Top streamed episodic content in the quarter included the first season of “Firefly Lane” (49 million), season three of “Cobra Kai” (45 million), “Fate: The Winx Saga” (57 million), and “Ginny & Georgia” with 52 million households. Other top movies included award-winning I Care a Lot (56 million), Jennifer Garner’s Yes Day (62 million), and the last installment of the To All the Boys I’ve Loved Before trilogy (51 million).

Netflix is on target to spend $17 million on content in 2021.

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“We program across many genres because tastes are very diverse,” co-CEOs Reed Hastings and Ted Sarandos wrote in the shareholder letter. “Even for one person, what they desire will vary widely depending on their mood or who they are watching with.”

Netflix Misses Q1 Subscriber Growth Estimate by 43%

In a rare misstep, Netflix reported first-quarter subscriber growth of 3.98 million globally, which was significantly down from a conservative company prediction of 6 million subs. The SVOD behemoth added almost 16 million subs in the previous-year period — driven by the COVID-19 pandemic.

Netflix added 448,000 subs in North America, ending the period with 73.4 million. It added more than 1.8 million subs in Europe, Middle East and Africa to end with 68.5 million. Netflix added 357,000 subs in Latin America to finish with 37.9 million. It added 1.36 million subs in Asia Pacific, ending the quarter with 26.8 million subs. The service has 207.6 million subs worldwide.

“We don’t believe competitive intensity materially changed in the quarter or was a material factor in the variance as the over-forecast was across all of our regions,” co-CEOs Reed Hastings and Ted Sarandos wrote in the shareholder letter. “We also saw similar percentage year-over-year declines in paid net adds in all regions, whereas the level of competitive intensity varies by country.”

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Netflix expects paid membership growth to re-accelerate in the second half of 2021 as the streamer ramp ups a strong back-half slate with the return of new seasons of “Sex Education,” “The Witcher,” “La Casa de Papel” (aka “Money Heist”), and “You,” as well as an array of original films, including the finale to The Kissing Booth trilogy and large scale movies Red Notice (starring Gal Gadot, Dwayne Johnson and Ryan Reynolds) and Don’t Look Up (with a cast that includes Leonardo DiCaprio, Jennifer Lawrence, Cate Blanchett, Timothée Chalamet and Meryl Streep).

Netflix said it expects to spend $17 million on content in 2021.

Meanwhile, Netflix scored financially, generating a $1.7 billion profit on revenue of $7.16 billion. That compared to net income of $709 million on revenue of $5.7 billion in the previous-year period. Free cash flow skyrocketed more than 400% to $692 million compared to $162 million last year.

Netflix generated $50 million in quarter from its legacy by-mail DVD and Blu-ray Disc rental service.

Parrot Data: New Platforms Gaining Demand Share at Expense of Netflix

As Netflix  releases its latest earnings report, Parrot Analytics has unveiled new data showing new platforms gaining demand share at the expense of Netflix.

Netflix is still the dominant player in the worldwide streaming game, according to the data, but its global and U.S. digital original demand share have shrunk to record lows in Q1 2021 due to rising competition from the likes of Disney+, Apple TV+, HBO Max and other services.

Nevertheless, total global demand for Netflix original content continues to grow, according to Parrot data.

The service accounted for seven of the top 10 most in-demand digital original series worldwide in Q1 2021, and had the most in-demand digital original in the United States with “Cobra Kai.”

Total global demand for Netflix’s original content has grown 62% over the last two years (Q2 2019 to Q1 2021). However, total global demand for original content on all other platforms grew 131% over the same time period.

Netflix’s global digital original demand share hit its lowest quarterly number ever, at 50.2% in Q1 2021, down from its 53.5% demand share for the full year 2020. Just two years ago (Q1 2019) its global demand share was at 64.6%.

“It’s also a testament to the remarkable success of the many new entrants to the streaming wars over the last 18 months in creating in-demand original content and carving out a niche at the expense of Netflix,” read a Parrot release.

Most notable has been the surge of Disney+, moving up to 6% worldwide demand share for Q1 2021 from just 3.6% share for the full year 2020, largely on the back of its two new Marvel series.

For the second straight quarter, Netflix’s digital original demand share has fallen below a majority in the United States, another sharp decline from two years ago when the streamer had 63.1% U.S. demand share in Q1 2019. Netflix’s U.S. share of digital original demand has been on a downward trajectory each month this quarter, ending with a 47.6% share in March in the United States.

Disney+’s trajectory has followed an almost inverse path from Netflix, up each month in Q1. It has risen to 7% U.S. digital original demand share, up from 5.4% for full year 2020. The first quarter saw the debut of Disney+’s highly anticipated slate of Marvel content, including the full run of “WandaVision,” and the first two episodes of “The Falcon and the Winter Soldier.”

Still, despite all the headlines and attention for Disney+’s tentpole Marvel series, Netflix’s “Cobra Kai was the most in-demand digital original series in the United States for Q1 2021.

While “Cobra Kai was not the most in-demand digital original globally in Q1 and Disney+ originals dominated the top of the charts, Netflix has strength in numbers. Seven of the top 10 original series globally in Q1 were Netflix originals (compared to five in the top 10 in the United States).

Netflix’s increasing emphasis on producing and promoting non-U.S. and non-English-language originals (particularly “Dark and “La Casa de Papel) is clearly paying off with global audiences, according to Parrot, as Netflix has more digital originals in the global top 10 and a higher global digital original demand share (50.2%) than its U.S. demand share (48.1%).

Parrot Analytics’ proprietary metric Demand Expressions measures demand for TV content in a given market through a wide variety of data sources, including video streaming, social media activity, photo sharing, blogging, commenting on fan and critic rating platforms, and downloading and streaming via peer-to-peer protocols and file sharing sites. Results are expressed as a comparison with the average demand for a TV show of any kind in the market.

Dakota Johnson to Star in Jane Austen Adaptation ‘Persuasion’ for Netflix

Dakota Johnson will star in the Jane Austen adaptation Persuasion for Netflix.

The film, produced in partnership with MRC Film, takes a modern, witty approach to the story while still remaining true to Austen’s classic novel, according to a Netflix release.

The story follows Anne Elliot, an nonconforming woman with modern sensibilities who is living with her snobby family on the brink of bankruptcy. When Frederick Wentworth — the dashing suitor she once sent away — crashes back into her life, Anne must choose between putting the past behind her or listening to her heart when it comes to second chances.

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Acclaimed theater director Carrie Cracknell, who directed Jake Gyllenhall and Tom Sturridge to Tony nominations last year in Sea Wall/A Life on Broadway, will make her feature directing debut.

Dakota Johnson recently starred in the drama Our Friend.

MRC Film recently announced The Mothership starring Halle Berry, also with Netflix; and most recently released the Oscar-nominated film Knives Out from writer/director Rian Johnson and The Lovebirds starring Kumail Nanjiani and Issa Rae with Netflix.

Parent Group Criticizes Hulu Content Controls; Hails Netflix, Disney+

The Parents Television and Media Council April 20 released a new study evaluating the most popular streaming services, finding that ad-supported services like Paramount+, Peacock, and Hulu are the most cost-effective, but that Hulu rates the worst with parental controls, while Netflix has the best oversight.

The PTC looked at both the up-front and hidden costs a family would pay by “cutting the cord” and switching to a streaming-only platform consisting of the most popular streaming services currently on the market. For the report’s non-economic analysis, the PTC reviewed the parental controls available on those most popular services.

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Ranked on a relative scale, Netflix was found to have the best parental controls of the major streaming services; Hulu, the worst. The parental controls available on Peacock, Paramount+ and HBO Max are similar enough to be virtually undistinguishable. Disney scores slightly higher because of the “kid-proof exit” feature, which requires users to answer a security question to switch profiles. Apple TV+ scored well because it  provides parents with data about screen usage.

Although most streaming services are still not using content descriptors to indicate elevated levels of sexual content, adult dialogue, foul language or violence, the PTC found most have  adopted some variation of content controls based on age-rating.

Most often these involve creating one or more separate user profiles, choosing an age or rating threshold (most often using a combination of TV Parental Guidelines and Motion Picture Association ratings), and PIN-restricted access to content above that age or rating threshold.

“With streaming increasing in popularity, due in part to increased screen time because of COVID lockdowns, families need to know which services will be most cost-effective,” Tim Winter, president of PTC, said in a statement. “But they also need to know which services will best protect children from harmful content.”

The study found Paramount+, Peacock, and Hulu to be the most cost-effective streamers, but less so when it comes to parental controls or enough distinction between age-appropriate programming. In fact, PTC found Hulu to be the worst of the various platforms for parental controls, even failing to distinguish between content that would be suitable for a 7-year-old versus a 13-year-old.

“Given that Hulu is owned by Walt Disney, we were surprised and disappointed that it didn’t have better parental controls,” Winter said.

For parents who are working to protect their children from age-inappropriate content, the challenges in the over-the-top video era have never been greater, according to Melissa Henson, PTC program director.

“Launching Netflix, Hulu, Amazon Prime Video, or any one of dozens of streaming apps gives a child instantaneous access to a virtually unlimited catalog of programming,” Henson said.

She said the PTC is encouraged that Netflix has made significant improvements to its parental controls, including allowing parents to block specific programs, since its last report on streaming TV. But Henson added that Netflix should continue to make more improvements, including giving users the ability to block entire categories of content.

“Disney+ remains the best alternative for families with young children looking to exclusively stream family-friendly content,” Henson said.

The PTC is calling on all streaming providers to develop and adopt industry best practices for robust parental controls; calling on the Congress to pass a legislative update to the Family Movie Act of 2005, so families can filter out explicit and age-inappropriate content; and calling on the FCC to revisit and renew the promises Congress made to families when it passed the Child Safe Viewing Act of 2008.

Meanwhile, from a cost perspective, the PTC found ad-supported streaming services like Paramount+, Peacock and Hulu to be the most cost-effective. Disney+ provides the best economic value for families with young children looking primarily or exclusively to stream family-friendly content.

Amazon Prime Video has many hidden costs, including additional “channels” and options to rent or buy that make its program inventory appear “deceptively” large, as many titles appear in a search that cannot be viewed without the addition of a channel.

Netflix Expected to Add 200K Q1 Subs in Nordics, Leads Region With 4.4 Million Households

Netflix is projecting six million new subscribers globally in the first quarter, ended March 31. New data from research group Mediavision contends the streamer added 200,000 subs in the Nordics, which includes, Norway, Sweden, Denmark, and Finland.

Netflix’s Q1 subscriber figures for the Nordic market show a year-on-year growth of 5%. According to Mediavision analysis, Netflix now has approximately 4.4 million households in the Nordics — tops for the region. Hence, the company’s growth is lower than the overall Nordic SVOD market growth, which is up about 8% year-on-year.

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The Nordic countries are all highly digitalized, partly driven by streaming services such as Netflix. The SVOD market penetration in Q1 as a Nordic average is approximately 60%. With the arrival of Disney+, and pending launches of HBO Max and Paramount+, Mediavision analysis suggests that Netflix, albeit still the single largest SVOD service, is no longer the front runner in terms of growth.

Netflix reports Q1 results today at the market’s close.

 

Is Netflix’s Pandemic Boom Over? Analysts, and Even the Streamer Itself, Think So

NEWS ANALYSIS — Heading into Netflix’s first-quarter fiscal results on April 20, market speculation regarding the streamer’s subscriber growth dominates.

Following a year, 2020, in which Netflix added a record 37 million subs, conventional wisdom suggests the SVOD pioneer can’t replicate, much less exceed, last year’s Q1 sub increase of 16 million subs.

London-based Ampere Analysis and Los Angeles-based analyst Michael Pachter contend Netflix added 6 million subs worldwide through March 31 — the lowest sub gain in four years. Of course, that’s playing it safe, considering Netflix itself has projected the same conservative sub growth.

That’s a smart move, since Netflix short-sellers typically salivate ahead of earnings, hoping for bad news — only to be dashed at the gallows when positive results come out.

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“It is not quite the end of the pandemic effect for streaming services, but we are beginning to see the tail end of it; it’s definitely on the wane,” Richard Broughton, analyst at Ampere, told The Guardian. “If Netflix’s numbers do come in as predicted, they will be the lowest for a good few years.”

Netflix ended 2020 with slightly more than 203 million subscribers and expects to end the first quarter of 2021 with 209.6 million subs. The service added 41% of subs from Europe and the Middle East.

“We’re becoming an increasingly global service, with 83% of our paid net adds in 2020 coming from outside the [North America] region,” co-CEOs Reed Hastings and Ted Sarandos wrote in the company’s Q4 shareholder letter. “The quarterly guidance we provide is our actual internal forecast at the time we report and we strive for accuracy.”

Pachter says Netflix has executed “extremely well” during the pandemic by keeping its “foot on the gas pedal” for subscriber growth, while benefiting from a disruption in content production that allowed it to generate — for the first time — positive free cash flow.

“While we are far more constructive about Netflix than we have been at any point in nearly a decade, we continue to question its [market] valuation,” the analyst wrote in a note.

Netflix continues to successfully fend off growing competition from Disney+; increased content spending from Amazon Prime Video; and pending European launches of HBO Max and Paramount+. As warmer weather arrives around the world and pandemic restrictions on social gatherings ease due to vaccinations, the number of consumers interested in binge-viewing the latest U.K. serial drama might wane.

“Netflix went into the pandemic as the strongest service, and although there has been the arrival of very successful new entrants such as Disney+, it is [still] in an extremely strong position now,” Broughton said.

Parrot: Death of Prince Philip Gave ‘The Crown’ a Demand Bump

The death of the U.K.’s Prince Philip increased global demand for the Netflix series “The Crown,” according to Parrot Analytics.

In the days immediately following Prince Philip’s death, “The Crown” saw double digit percentage increases in demand worldwide, and in the show’s two most popular markets — the United Kingdom and the United States.

From April 8 (the day before Prince Philip’s death) to April 10, Parrot Analytics tracked the following increases in audience demand for “The Crown”:

  • U.S. demand increased by 47.1%, peaking at 28.1 times more in-demand than the average series in the United States on April 10;
  • U.K. demand increased by 28.8%, peaking at 30.4 times more in-demand than the average series in the United Kingdom on April 10;
  • Worldwide demand increased by 30.1%, peaking at 51.4 times more in-demand than the average series globally on April 10.

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By April 10, “The Crown” rose up the demand ranks, becoming the 30th most in-demand series in the United States across all platforms, up from 96th most on April 8; the fifth most in-demand series in the United Kingdom across all platforms, up from 12th most on April 8; and the eighth most in-demand series worldwide across all platforms, up from 25th most on April 8.

While the Prince Philip bump has been a boon for “The Crown,” Parrot tracked even higher global and United Kingdom demand for the show following two other recent news events — the show’s multiple wins at the Golden Globes on Feb. 28 and Prince Harry and Meghan Markle’s bombshell interview with Oprah Winfrey on March 7.

Parrot Analytics’ proprietary metric Demand Expressions measures demand for TV content in a given market through a wide variety of data sources, including video streaming, social media activity, photo sharing, blogging, commenting on fan and critic rating platforms, and downloading and streaming via peer-to-peer protocols and file sharing sites. Results are expressed as a comparison with the average demand for a TV show of any kind in the market.

Pete Davidson to Star in Biopic ‘I Slept With Joey Ramone’ for Netflix

Netflix and STXfilms have partnered to develop and produce I Slept with Joey Ramone, a biopic chronicling the life of the punk rocker.

Directed by Jason Orley (Big Time Adolescence, Pete Davidson: Alive From New York and upcoming film I Want You Back), the film will star Pete Davidson (“Saturday Night Live,The King of Staten Island, Big Time Adolescence and upcoming films The Suicide Squad and American Sole). The treatment is written by Pete Davidson and Jason Orley based on the Mickey Leigh memoir of the same name.

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“When you share a bed with someone — and not just a bed, but a childhood, a family, and a lifetime — you know that person better than anybody else,” Adam Fogelson, chairman STXfilms Motion Picture Group, said in a statement. “Mickey Leigh not only collaborated with his big brother’s band — he has irreplaceable memories of and insights into Joey Ramone, having supported him when no one else would and witnessed him overcome adversity in the most dramatic way. I Slept with Joey Ramone is a great rock anthem that will make an equally great rock biopic, set apart by a universal story of family. Pete is perfect for this role, and we’re excited he and Jason will be bringing this icon of rock to life and thrilled to be collaborating once again with our friends at Netflix.”

The film will be made with the cooperation and support of the Estate of Joey Ramone and with the assistance of Rosegarten Films.

Orley and Davidson previously teamed up on the feature film Big Time Adolescence, which Orley wrote and directed. Orley also directed Davidson’s standup special Alive from New York for Netflix.

Amazon Upped 2020 Content Spend 41% to $11 Billion

Among streamers such as Netflix, Disney+, HBO Max, Hulu and Peacock, Amazon Prime Video remains relatively under the radar when it comes to publicized content spending.

So when founder/CEO Jeff Bezos released his final shareholder letter April 15, the world’s richest man threw out a lot of big numbers befitting a company tagged on Wall Street as No. 1 in market valuation. Not to be overlooked in the data dump: $11 billion in content spend on movies, TV shows and music in 2020. That’s up 41% from $7.8 billion in combined content spending in 2019.

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Netflix spent $11.8 billion on content in 2020, which was actually down almost 15% from $13.9 billion spent in 2019.

Amazon in recent years reduced content production as it focused monies on high-profile license agreements such as “NFL Thursday Night Football,” according to analyst Michael Pachter with Wedbush Securities in Los Angeles. He says Amazon is positioning to resume releasing original content at a steadier clip, as it had in the past. Amazon Studios recently installed a new, more comprehensive TV development team in place.

“We view [the move] as a way [for Amazon] to remain relevant in the face of heightened competition from various other streamers,” Pachter wrote in a note.

Separately, Bezos said the e-commerce pioneer created $126 billion in “value creation” economic benefit to consumers in 2020. He said most Amazon consumers complete 28% of their online purchases in three minutes or less, and half of all purchases are finished in less than 15 minutes.

When compared to the typical shopping trip to a physical store — driving,
parking, searching store aisles, waiting in the checkout line, finding your car, and driving home. Bezos said research suggests the typical physical store trip takes about an hour.

“If you assume that a typical Amazon purchase takes 15 minutes and that it saves you a couple of trips to a physical store a week, that’s more than 75
hours a year saved,” Bezos wrote.

Indeed, when valuing the time saved shopping through e-commerce at $10 per hour, Bezos estimates the average Amazon Prime member created $630 in annual “value creation” for themselves. A tally that skyrockets to $126 billion when multiplied by 200 million Prime members.

“That’s important,” wrote Bezos.