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Netflix Exceeds Expectations, Adding 10.1M Paid Viewers In Q2

Driven by global COVID-19 lockdowns, Netflix has exceeded its new paid membership forecasts for Q2 2020 by 2.6 million, adding a Q2 record of 10.1 million that quarter. By comparison, Netflix only gained 2.7 million paid memberships in Q2 2019.

“In the first half of this year, we’ve added 26 million paid memberships, nearly on par with the 28 million we achieved in all of 2019,” Netflix told its shareholders.

“However, as we expected, growth is slowing as consumers get through the initial shock of Covid and social restrictions.”

As a result, Netflix expects to add 2.5 million paid memberships in Q3 2020, compared to 6.8 million paid memberships in the corresponding 2019 quarter.

In terms of original content, Netflix revealed that they are slowly resuming productions in many parts of the world, dependent on how countries are handling COVID-19 cases.

Source: Netflix Letter to Shareholders Q2

“We are furthest along in Asia Pacific (where we never fully shut down in Korea, for example) and are now shooting live action series like season 2 of our Japanese original ‘The Naked Director’,” Netflix stated.

“Since our content production lead time is long, our 2020 plans for launching original shows and films continue to be largely intact. For 2021, based on our current plan, we expect the paused productions will lead to a more second half weight content slate in terms of our big titles, although we anticipate the total number of originals for the full year will still be higher than 2020.”

Netflix also revealed it has acquired new movies and shows, including ‘Spongebob Movie: Sponge on the Run’ and ‘Emily in Paris’.

In Q2 revenue grew by 25% year-on-year, and the quarterly operating income exceeded $1 billion. Netflix’s operating margin also rose 22.1% year-on-year.

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