Netflix released on Thursday, after the market closed in the United States, its earnings results in the second quarter of 2020. The video streaming pioneer gained 10.09 million new subscribers between April and June, reaching a total of 192.95 million subscribers worldwide. In the annual comparison, of the quarter of this year against the same quarter of last year, the registered growth was 27.3%.
In Latin America, the company gained 1.75 million subscribers in this year’s second quarter, reaching a total of 36.07 million users in the region. Latin America is the third region with most Netflix subscribers, behind the United States and Canada (72.9 million) and Europe, Middle East, and Africa (61.48 million), but ahead of Asia (22.49 million subscribers).
According to the company, the highly positive variance was due to better-than-forecast acquisition and retention. “In the first half of this year, we’ve added 26m paid memberships, nearly on par with the 28m we achieved in all of 2019. However, as we expected, growth is slowing as consumers get through the initial shock of COVID and social restrictions”, said the company in the letter for its shareholders.
For the second half of 2020 as a whole, the company said it expects a slower pace of growth. “We expect less growth for the second half of 2020 compared to the prior year. As we navigate these turbulent circumstances, we’re focused on our members by continuing to improve the quality of our service and bringing new films and shows to people’s screens,” said Netflix. In the third quarter, the company expects to attract just 2.5 million new subscribers.
Resumption of original productions in Latin America still has no date to happen
When it comes to production, the company explains that is adopting specific approaches to each market since the new coronavirus pandemic is behaving differently around the world. “We’re slowly resuming productions in many parts of the world. We are furthest along in Asia Pacific (where we never fully shut down in Korea, for example) and are now shooting live-action series like season 2 of our Japanese original The Naked Director,” wrote the company.
In Europe, Middle Eats, and Africa, the company is resuming its activities in many countries, including Germany, France, Spain, Poland, Italy, and the UK.
“While we recently resumed production on two films in California and two stop-motion animation projects in Oregon and expect some more of our US productions to get going this quarter, current infection trends create more uncertainty for our productions in the US. 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”.
In Q2, the company’s revenue grew 25% year over year, to $6,148 billion, while quarterly operating income exceeded $1 billion – probably a bright side of the delay in productions.
Recognizing that competing platforms are investing heavily to grow, citing WarnerMedia’s HBO Max, Disney‘s services, NBCUniversal‘s Peacock, Netflix also stressed that it will continue to invest in improving its services and productions. “Instead of worrying about all these competitors, we continue to stick to our strategy of trying to improve our service and content every quarter faster than our peers. Our continued strong growth is a testament to this approach and the size of the entertainment market.”