Source: Netflix, CNBC
Netflix, the leading streaming entertainment service provider, has released its third-quarter 2020 financial results by posting them to its website netflixinvestor.com
In the Q3 results, the APAC region was the largest contributor to the paid membership growth this quarter (46% of Q3 global paid net adds) and APAC revenue rose 66% year over year. The company is pleased with the progress making in this region and, in particular, that they achieved double-digit penetration of broadband homes in both South Korea and Japan. The report said the company still have much work to do and already working hard to replicate this success in India and other countries.
The state of the pandemic and its impact continues to make projections very uncertain, but as the world hopefully recovers in 2021, Netflix would expect that our growth will revert back to levels similar to pre-COVID. In turn, the expect paid net adds are likely to be down year over year in the first half of 2021 as compared to the big spike in paid net adds they experienced in the first half of 2020. Netflix continue to view quarter-to-quarter fluctuations in paid net adds as not that meaningful in the context of the long-run adoption of internet entertainment, which the company believe is still early and should provide us with many years of strong future growth as we continue to improve our service.
Netflix was forced to suspend production in multiple locations of the world due to the COVID-19 pandemic, which also caused the delay in releasing some shows. But in its second-quarter earnings report, it said that it had resumed production and was “furthest along” in the Asia Pacific.
The pandemic has also forced people to stay at home, which has benefited Netflix as consumers watch more content. During the first half of the year, Netflix reported a massive surge in subscribers that blew analyst estimates out of the water.
While management has cautioned that the pandemic has made it difficult to accurately predict future subscriber growth, Netflix in July said it expected 2.5 million net subscriber additions for the third quarter. Analysts had been more optimistic, projecting 3.57 million net adds, according to FactSet consensus estimates.