Netflix Reports Earnings, Explains Gaming Plans

Netflix earned a net income of $1.7 billion on revenues of $7.3 billion in the quarter ending June 30, and it now has over 209 million paid subscribers.

“COVID has created some lumpiness in our membership growth—higher growth in 2020, slower growth this year—which is working its way through [our financial results],” the firm wrote in a letter to shareholders. “We continue to focus on improving our service for our members and bringing them the best stories from around the world.”

Netflix is still the go-to video streaming service worldwide, but it has seen increased competition from newer services like Disney+ and HBO Max. Still, Netflix says it has plenty of room to grow, since streaming represents just 27 percent of total screen time in the U.S., compared to 63 percent for “linear TV,” and Netflix is just 7 percent of that former figure. That’s better than YouTube and YouTube TV (6 percent), Hulu (3 percent), Prime Video (2 percent), and Disney+ (2 percent), according to Nielsen.

Netflix added 1.5 million new subscribers in the second quarter of 2021, ahead of projections. And it plans to add another 3.5 million subscribers in the current quarter, lower than the 5.5 million predicted by investors. And CEO Reed Hastings says that newer competitors haven’t hurt it at all so far.

“We’ve been competing with Amazon Prime for 13 years, with Hulu for 14 years,” he said. “It’s always been very competitive with linear TV, too. So there’s no real change that we can detect in the competitive environment.”

As for its plans for video games, Netflix says that it will start with mobile games first and that games will be part of existing subscription tiers and not a new offering.

“We’re in the early stages of further expanding into games, building on our earlier efforts around interactivity—e.g. Black Mirror Bandersnatch—and our Stranger Things 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 … Since we are nearly a decade into our push into original programming, we think the time is right to learn more about how our members value games.”

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Conversation 12 comments

  • cnc123

    20 July, 2021 - 8:20 pm

    <p>I’m cheap, but I’m only running one streaming service at a time, plus Amazon, which is really just due to Prime. I cancelled Netflix months ago, and have been swapping between Hulu, Disney+ and AppleTV+ and eventually Netflix again, depending on which shows have been released. I cut the cord a decade ago, and see no reason to pay cable prices for all of those services when I can just organize what I want to watch by service. </p><p><br></p><p>Also, protip – I have an HTPC, and while it has its downsides, one advantage is that I don’t see ads in YouTube and I don’t have to pay them for a subscription.</p>

    • wright_is

      Premium Member
      21 July, 2021 - 5:53 am

      <p>Until now, we’ve had only Prime, we probably watch 2 – 3 hours a month.</p><p><br></p><p>I bought an iPad recently, so we now have Apple TV+ for a year. So far, apart from Greyhound and Long Way Up, I haven’t found anything that I really want to watch.</p><p><br></p><p>I’ve heard people raving about Ted Lasso, but it was so appalling, that I gave up after about 20 minutes of the first episode… :-S</p>

      • crunchyfrog

        Premium Member
        21 July, 2021 - 7:44 am

        <p>I appreciate your comments on Ted Lasso. I can’t understand why people think it’s so funny. It really is appalling and makes American’s look even more so.</p>

        • Paul Thurrott

          Premium Member
          21 July, 2021 - 8:32 am

          <p>Even more … appalling? Well, that’s nice.</p>

      • drewtx

        Premium Member
        22 July, 2021 - 6:14 pm

        <p>I’m not a big user of Apple TV+ but yes, Long Way Up and Greyhound were very good.</p><p><br></p><p>As somebody who is UK/US bi-cultured (having spent roughly half my life so far in each country), I enjoyed Ted Lasso.&nbsp;Yes, the first few episodes are a little shaky, but it evolves from a bit of a cliché into fun show.&nbsp;I strongly disagree that it portrays Americans as being appalling; Ted Lasso is a likable, sympathetic character and is the hero of the show!</p><p><br></p><p>Apple TV+ does still seem a little light on content but what they have is well made and I’m optimistic that there is more on the way. I’ll probably continue paying when my free trial period expires.</p>

    • Paul Thurrott

      Premium Member
      21 July, 2021 - 8:31 am

      <p>Cheap? That just sounds smart.</p>

  • thewarragulman

    Premium Member
    20 July, 2021 - 8:47 pm

    <p>It would be cool if Netflix partnered with Microsoft and bundled Game Pass with a Netflix subscription, or added a sort of "god tier" subscription where you can pay for both Netflix and Game Pass Ultimate and just have the one bill to pay, therefore you have all of Game Pass as well as Netflix, which will cover most people’s entertainment needs, and if TV/set-top box manufacturers add an Xbox app to their products to allow for game streaming directly from the TV, all you’d need to buy is an Xbox controller and most people would be all set for TV, movies and most AAA games.</p><p><br></p><p>Of course, us hardcore enthusiasts will still want a dedicated console or a PC, I love my Series X and all but if you’re in an area where the internet is good enough to do game streaming I don’t see why this wouldn’t be a popular option to have both your TV/movie and game content all from one source.</p>

  • troughley

    Premium Member
    21 July, 2021 - 10:24 am

    <p>Enjoyed For All Mankind on Apple TV +. </p>

  • DBSync

    21 July, 2021 - 11:28 am

    <p>If T-mobile did not give it to me as part of my plan I would have dropped Netflix a while ago.</p>

  • richfrantz

    Premium Member
    21 July, 2021 - 3:23 pm

    <p>By separating broadcast and cable, does that mean broadcast is OTA?</p>

  • scovious

    22 July, 2021 - 2:10 am

    <p>Wow there is so much room for streaming services to grow. Imagine how few people would tolerate cable if comprehensive news and sports were in a streaming service…</p>

  • drewtx

    Premium Member
    22 July, 2021 - 6:21 pm

    <p>Interesting that YouTube (6%) is <em>lower</em> than Netflix (7%)</p><p>Given that YouTube is free, and popular with the youths, I would have expected it to beat all subscription services (in terms of screen time).</p>


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