The South Korean hit drama, released in September, was the biggest series launch ever for the video streaming service, reaching more than 142 million viewers worldwide. Netflix forecast it will add 8.5 million subscribers in the fourth quarter of this year, above the 8.33 million expected by Wall Street, and reach 18.4 million new viewers for the year.
Most new subscribers grew outside the United States, with the Asia Pacific region contributing 2.2 million new net paying subscribers.
Netflix’s growth slowed in the first half of the year, as production delays related to Covid-19 reduced the number of new shows offered. Competition from studio-owned video streaming services has also increased, with Disney Plus, HBO Max and others launching aggressive campaigns to capture the attention of stranded viewers.
But Netflix got back on its feet with Squid game, a surprise hit released on September 17 that the company said became its biggest TV show. He said that the demand for Squid game merchandise was high and he had started shipping consumer products to retailers.
Netflix has come under fire for mishandling the controversy that followed the third quarter release of its latest stand-up special by comedian Dave Chappelle, The closest. Ted Sarandos, co-managing director, backed the show, which was condemned as transphobic. Some Netflix employees are threatening to come out on Wednesday in protest.
Netflix said it expected to see “the positive effect of a stronger roster” of programming in the second half, including the big-budget action movie. Red Notice, with Dwayne Johnson, Gal Gadot and Ryan Reynolds, and Don’t look up starring Leonardo DiCaprio, Jennifer Lawrence and other stars.
“We are in uncharted territory,” said Reed Hastings, co-managing director. “We have so much content coming up [in the fourth quarter], like we’ve never had.
The company said it began testing its fledgling games business, which it expanded in the third quarter with the acquisition of game producer Night School Studio.
Company officials said the in-game push was very early, but the goal was to offer a service without the features unpopular on other platforms such as in-game ads and monetization.
Hastings said he hoped the company would soon be able to create a “full experience,” where a hit show such as Squid game could lead to a successful consumer product offering and a video game.
“A company like Disney is ahead of us in setting up the whole experience,” he said. “Over the next three to five years, we want to catch up and maybe give them the full experience. ”
Without further disruption from Covid, Netflix said it expected to release more original shows in 2022 than it did this year. In a research note, analysts at Morgan Stanley predicted the company would experience better subscriber growth next year, with net additions of around 25 million.
Shares of Netflix, which have underperformed the overall market so far this year, have fallen 1% in after-hours trading.