Although the company puts this mostly down to its “large membership base” in the region “coupled with a seasonally smaller quarter for acquisitions”, industry observers have pointed out that the loss was double what it had previously predicted.
Netflix had 73.95 million paying customers in UCAN in Q2, down from 74.38 million in the previous quarter. However, average revenue per membership amounted to $14.54, up from $14.26 in Q1 and $13.25 in the same period last year.
Elsewhere, Netflix gained only 190,000 paid net additions in EMEA in Q2, compared to 1.81 million in the first quarter. In the LATAM and APAC regions the figures were 760,000 (360,000) and 1.02 million (1.36 million) respectively. All told, the company added around 1.5 million paid memberships in Q2, which was slightly ahead of its 1 million guidance, with APAC being the main driver for growth.
Total global paid memberships in Q2 stood at 209.18 million, up from 207.64 million in the first quarter, with the figure forecast to rise to 21.68 million in Q3. At the same time, Netflix expects the global streaming paid net addition total to more than double from 1.54 million in Q2 to 3.5 million in Q3.
Netflix’s revenues in Q2 were $7,342 million, or 19% more than a year earlier, and it is forecasting this figure to rise to $7,477 million in the third quarter.
Netflix notes it is in the early stages of expanding into games. “We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV. Games will be included in members’ Netflix subscription at no additional cost similar to films and series. Initially, we’ll be primarily focused on games for mobile devices”.
Commenting on competition, Netflix says we are still very much in the early days of the transition from linear to on-demand consumption of entertainment.
Streaming represents just 27% of US TV screen time, compared with 63% for linear TV, according to Nielsen. Based on this same study, undertaken in June, Nielsen estimates that Netflix accounts for just 7% of US TV screen time, compared to 6% for YouTube, 3% hulu, 2% Amazon Prime Video and 2% Disney+. All told, streaming services account for just of a quarter (27%), with cable (40%), broadcast (23%) and other services (9%) claiming the remainder.
Given its share is even lower in other countries, “our goal is to continue to increase our share of screen time in the US and around the world”.