Netflix Forecasts Slower Subs Growth in Q3

Netflix reported second-quarter revenues of $6.1 billion, a 25 percent year-on-year gain, with 10.1 million net subscription additions, but warned of a slower Q3, projecting subs additions of 2.5 million.

Netflix ended Q2 with 192.95 million customers, a year-on-year growth of 27.3 percent. Of this, 72.9 million are in the U.S. and Canada, 61.5 million in EMEA, 36.1 million in LatAm and 22.5 million in AsiaPac. Netflix expects to reach 195.45 million subscribers by the end of Q3. The 10.1 million subs gain was a record for the second quarter—the platform added 2.7 million in last year’s Q2. “However, as we expected, growth is slowing as consumers get through the initial shock of COVID and social restrictions,” the company said in its letter to shareholders. “Our paid net additions for the month of June also included the subscriptions we cancelled for the small percentage of members who had not used the service recently.”

Announcing its financials, Netflix also revealed that Ted Sarandos is becoming co-CEO alongside Reed Hastings. He will also remain chief content officer. “Ted has been my partner for decades,” Hastings said. “This change makes formal what was already informal—that Ted and Ishare the leadership of Netflix.”

In addition, Greg Peters has been appointed COO, adding to his chief product officer role.

Netflix said its journey to resume production was most advanced in AsiaPac, with Korea never having stopped production and filming underway on series such as The Naked Director in Japan. In EMEA, production has resumed in Germany, France, Spain, Poland, Italy and the U.K. The situation is more challenging in the U.S., where “current infection trends create more uncertainty for our productions. Parts of the world like India and some of Latin America are also more challenging and we are hoping to restart later in the year in these regions.”

The 2020 launch slate is largely intact, the company said. “For 2021, based on our current plan, we expect the paused productions will lead to a more second half weighted content slate in terms of our big titles, although we anticipate the total number of originals for the full year will still be higher than 2020.”