The breakout success of Squid Game helped Netflix double its net new subscribers in the third quarter to 4.4m, exceeding forecasts and signalling a strong finish to the year.
The South Korean hit drama, released in September, has been Netflix’s biggest-ever series launch, reaching more than 142m viewers globally. Netflix projected it would add 8.5m subscribers by the end of the year, higher than the 8.33 million expected by Wall Street.
Most new subscriber growth came outside the US, with the Asia-Pacific region contributing 2.2m paid net new subscribers.
Netflix’s growth slowed in the first half of the year, as Covid-19 related production delays dented the number of new shows on offer. Competition from studio-owned streaming services also picked up, with Disney Plus, HBO Max and others launching aggressive campaigns to capture the attention of locked-down viewers.
But Netflix has regained its momentum with Squid Game, a surprise hit released on September 17 that the company says has become its biggest TV show. It said demand for Squid Game merchandise is high and it has started shipping consumer products to retailers.
Netflix has been criticised for mishandling the controversy that followed the third-quarter release of its latest stand-up special by comedian Dave Chappelle, The Closer. Ted Sarandos, co-chief executive, has stood by the show, which has been condemned as transphobic. Some Netflix employees are threatening to walk out on Wednesday in protest.
Netflix said it expected to see the “positive effect of a stronger slate” of programming in the second half of the year, including the big-budget action film Red Notice, starring Dwayne Johnson, Gal Gadot and Ryan Reynolds, and Don’t Look Up, featuring Leonardo DiCaprio, Jennifer Lawrence and other A-listers.
The company said it had started testing its nascent games business, which it expanded in the third quarter with the acquisition of game producer Night School Studio.
Without further Covid disruptions, Netflix said it expected to release more original programming in 2022 than it has this year.
Shares in Netflix, which have underperformed the broader market so far this year, fell 1 per cent in after-hours trading.