Netflix added 6.8 million subscribers in the third quarter of this year internationally, compared to seven million it had forecast, even as the streaming giant braces for stiff competition as Apple and Disney prepare to launch similar services.
Netflix reported $5.2 billion in revenue in the third quarter, up 31 per cent over the prior year, and operating income doubled to $1 billion.
“In Q3, our guidance forecast was our most accurate in recent history,” Netflix said on Wednesday in a letter to shareholders.
The results cheered investors as shares of the streaming giant rose over five per cent in after hours trading.
“We have been moving increasingly to original content both because of the anticipated pullback of second run content from some studios and because our original content is working in the form of member viewing and engagement,” Netflix said, adding that its “Stranger Things Season 3” emerged as its most watched season to date with 64 million member households in its first four weeks.
Netflix said that it will continue to expand its non-English language original offerings because they help the company increase penetration in international markets.
“”The Naked Director” broke out as the biggest title launch for us in Japan and was also highly successful throughout Asia. Similarly, in India, we debuted the second season of ”Sacred Games”, our most watched show in India,” the company said.
“To date, we have globally released 100 seasons of local language, original scripted series from 17 countries and have plans for over 130 more in 2020. We also plan to expand our investment in local language original films and unscripted series,” it added.
In its letter to shareholders, Netflix exuded confidence of weathering the competition from Apple and Disney.
“The upcoming arrival of services like Disney+, Apple TV+, HBO Max, and Peacock is increased competition, but we are all small compared to linear TV,” Netflix said.
“The launch of these new services will be noisy. There may be some modest headwind to our near-term growth, and we have tried to factor that into our guidance. In the long-term, though, we expect we”ll continue to grow nicely given the strength of our service and the large market opportunity,” it said.