After the COVID-19 pandemic drove impressive subscriber growth earlier this year, Netflix’s numbers have come back down to Earth.
The streaming service added 15.77 million net new subscribers in the first quarter of the year, followed by 10.09 million in Q2. It only projected 2.5 million for Q3.
Today’s earnings report shows the company falling short of that already underwhelming goal, with only 2.2 million net additions, bringing its total subscriber base to 195 million. And it’s forecasting 6.0 million net additions in Q4, compared to 8.8 million in the same period last year.
“As we have highlighted in our recent investor letters, we believe our record first half paid net additions would result in slower growth in the back half of this year,” the company said in its letter to shareholders. “If we achieve our forecast, it will put us at a record 34m paid net adds for 2020, well above our prior annual high of 28.6m in 2018.”
The company also said that “retention remains healthy and engagement per member household was up solidly year over year.”
While the pandemic may have accelerated Netflix’s user growth, it also halted film production for safety reasons. That’s meant a slowing release schedule — though the delay is less noticeable for Netflix, as it had so many shows and movies in the pipeline.
With production resuming, the company said it’s actually completed principal photography on more than 50 productions since mid-March, with plans to do the same for 150 additional productions by the end of the year.
The fourth season of “Stranger Things,” the second season of “The Witcher” and action film ”Red Notice” (starring Dwayne Johnson, Gal Gadot and Ryan Reynolds) have all resumed production as well.
The announcement includes viewership numbers for a handful of shows and movies released in the last quarter: 43 million subscribers chose to watch the new season of “The Umbrella Academy,” 48 million chose to watch “Ratched,” 38 million chose to watch “The Social Dilemma” and 78 million chose to watch the Charlize Theron action movie “The Old Guard.” (Reminder: Netflix’s “chose to watch” metric refers to the number of subscribers who watched at least two minutes of a program.)
Update: Co-CEO Ted Sarandos discussed the current state of production during the investor interview, where he said the company is “nearly fully operational in most parts of the world.” He predicted that the service will be able to release its planned 2021 slate on schedule, with just a few delays and “minor exceptions.”
And although Netflix has also had to halt production on some shows due to positive COVID tests, Sarandos said that should be expected: “The art of it is how quickly and safely can you reopen.”
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