SEÑAL NEWS | RESEARCH WEEK #43

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Q3 2020, A SLOW QUARTER FOR NETFLIX’S GROWTH WEEK #43 ∙ OCTOBER 2020

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Q3 2020, A SLOW QUARTER FOR NETFLIX’S GROWTH #WEEK 43 ∙ OCTOBER 2020

NETFLIX NEW SUBSCRIBERS PROGRESS - 2012/2020

IN THEIR RECENTLY RELEASED Q3 2020 EARNINGS REPORT, NETFLIX ADDED 2.2M GLOBAL NET SUBSCRIBERS. THIS FIGURE IS JUST SHY OF THEIR ESTIMATED GAIN FOR THE QUARTER OF 2.5M.

(Millions)

15

10

5

0

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: Netflix

NETFLIX GLOBAL PAID SUBSCRIBER ADDITIONS 8.9

March 2019 June 2019

S&P Global Estimates (M) Actuals (M)

9.6

7.0 6.8

September 2019 December 2019

7.6

8.8

7.0

March 2020

15.8

7.5

June 2020

10.1

2.5 2.2

September 2020

NETFLIX REVEALED THAT IT HAD 73.08 MILLION PAYING STREAMING SUBSCRIBERS IN THE UNITED STATES AND CANADA, MAKING NORTH AMERICA THE COMPANY’S LARGEST MARKET IN THE WORLD, FOLLOWED BY THE EMEA REGION.

5.0

2.7

Source: S&P - Netflix

NETFLIX SUBCRIBERS VS LEADING QUARTER DEMAND FOR ORIGINALS Subscribers

60%

10%

50%

9%

40%

8%

30% 20%

7% 6%

10%

5%

0%

4%

PRE-PANDEMIC Q1 GUIDANCE

-00%

Q2 2020

-20% -30%

3% 2% 1%

DEMAND -40% SHIFTED 1 QUARTER Q2 Q3 Q4 2018

Source: Parrot Analytics

Q1

Q2

Q3 2019

Q4

Q1

Q2 2020

Q3 2020 Q3

0%

% Change Subscribers

Tentpole Demand (Shifted)

COVID EFFECT

% Change Tentpole Demand

Global 2018 to 2020

A POSITIVE INDICATOR IS THE DECAY RATE OF CONTENT ON NETFLIX IS IMPROVING ACROSS REGIONS. IT SHOWS THAT DEMAND FOR CONTENT AVAILABLE ON NETFLIX IS HOLDING UP BETTER OVER TIME.

DECAY OF CONTENT AVAILABLE ON NETFLIX

APAC EMEA LATAM UCAN

0%

-10%

-20%

+5.4% -30%

+5.7% +7.3% +7.2%

-40%

-50%

-60%

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2017

2018

2019

2020

Decay Rate is average % decline in demand QoQ among all titles decreasing in demand.

Source: Parrot Analytics