Netflix 3Q Earnings “What is the effect of the squid game?”

Streaming service company Netflix has announced its third quarter 2021 earnings. The quarter saw an increase in paid memberships of 4.4 million, nearly doubling from the same period last year. As content that has been delayed due to the global pandemic is released sequentially, the growth of paid members is further accelerated, and is expected to reach 8.8 million in the fourth quarter of 2021, the next quarter.

In the third quarter, Netflix posted operating profit of $1.755 billion, up 33% year-over-year, with revenue of $7.483 billion, up 16% year-over-year. Although the number of paid members increased by 2.2 million in the same period of the previous year, the number of paid members increased by 4.38 million in this quarter, doubling the rate of growth in the year. This record-breaking new subscriber growth brings the total number of paid members to 213.56 million, and the company says it is pleased to expect to deliver the most powerful content to date in the fourth quarter, which closes in 2021.

Although Netflix reported the highest revenue in the past, the company predicts that it will double in the next quarter by further accelerating the growth of paid subscribers doubling in a year. Supporting this prediction is that a lot of content that has been delayed due to the COVID-19 infection will be delivered, so more new subscribers are expected to increase than ever before.

Due to this increase in new subscribers, sales are expected to drop to $7.712 billion and operating profit to drop to $500 million in the fourth quarter.

In this announcement, Netflix said that Squid Game became the largest TV show ever on Netflix, and it is surprising that 142 million households watched Squid Game for at least two minutes for the first time in the four weeks immediately after the announcement.

Squid Game was watched by 142 million households in 4 weeks, and Netflix’s 3Q earnings report also revealed that the popularity of Squid Game played a part in significantly improving both sales and profits compared to the previous year.

The squid game is a kind of death game in which 456 people who are financially needy challenge a game with a high bounty as collateral. It was so popular that it took the first place in the viewership rankings in 94 countries and regions, and it is leading the trend by broadcasting a parody featuring Rami Malik, who appeared in Bohemian Rhapsody on Saturday Night Live, a popular American TV program, or by pouring memes on TikTok. At Halloween, the demand for squid game costumes also skyrocketed.

According to Netflix, Squid Game was watched by 82 million households in the first 28 days, surpassing Bridgerton, and as of October 12, 111 million viewers watched the drama for at least two minutes. In the 23 days after the first delivery, the number of viewers of Squid Game reached 132 million, 117 million watched over 75 minutes, and 87 million watched all. Related information can be found here.