Netflix subscriber growth has slowed as predicted after the streaming platform saw a spike in customers during the first half of 2020.
Despite a surge in subscribers in the first half of the year, Netflix’s third quarter saw slower growth and the company is now looking at ways to introduce its service to new users.
On Netflix’s Q3 earnings call, chief financial officer Spencer Neumann said that subscriber numbers and revenues were “very much as expected”. Shares dropped more than 6pc during after-hours trading, according to CNBC.
Its total revenue increased to $6.44bn, but subscriber additions fell a little short. There were 2.2m net subscribers instead of the 2.5m in Netflix’s guidance. However, in the first nine months of 2020, the company added a total of 28.1m paid memberships, exceeding the 27.8m that it added in all of 2019.
Neumann said that retention is at “healthy levels” and better than it was a year ago, even if the company is now experiencing a “slowdown”.
In terms of content on the site, co-CEO and chief content officer, Ted Sarandos, said that more than 50 productions have been completed since the pandemic began. The company expects to finish another 150 by the end of the year.
Free access for a weekend
COO and CPO Greg Peters added that Netflix is considering giving everyone in a country free access to the platform for a weekend. This could “expose a bunch of new people” to content on the site and how it works, he explained, with the aim of attracting more subscribers.
“So, we’re going to try that in India and we’ll see how that goes,” he said. “And that’s just an example of the kind of innovation that we seek to do in this space.”
The company has been phasing out its 30-day free trial, which was previously available to all new members. However, it has also recently decided to stop billing customers who haven’t watched anything on the platform in two years or more.
Working from home a ‘pure negative’
Last month, Netflix co-CEO Reed Hastings said he will bring staff back into the office as soon as he can. While many big companies have rolled out permanent remote working policies, Hastings said he doesn’t see any positives with dispersed teams and wants to return to the workplace “six months after a vaccine”.
Hastings made no further comments on those plans during the company’s earnings call. He did say, however, that he views the impacts of Covid-19 as “very onetime in nature” and so is not overly focused on its impact on revenue.