After the windfall of confinements, Netflix faced with the saturation of its markets

With the confinement, Netflix has accumulated more than 28 million new paid subscriptions from January to September 2020. The American group notes that user retention remains "solid".

The bubble caused by confinement and stay-at-home orders is deflating somewhat for Netflix. The streaming video service saw its growth slow in terms of users this summer, especially in its mature markets, but the platform, which is approaching 200 million subscribers, remains, for now, a length of ahead of its competitors.

The streaming giant rallied some 2.2 million new followers from July to September, slightly less than its own forecasts (2.5 million), and much less than a year ago: 6.8 million in third quarter 2019, according to its earnings release released Tuesday.

Its title lost nearly 6% in electronic exchanges after the close of the New York Stock Exchange, the Californian group having also disappointed in terms of net earnings per share, at 1.74 dollars instead of 2.13 dollars expected by the market.

"This is mainly due to our record first half results," said Netflix, which racked up more than 28 million new paid subscriptions from January to September 2020, a little more than throughout 2019.

“Retention remains solid and engagement per household member was up over one year,” the platform also assures.

Focus on India and re-evaluated offers

Most of the growth in its subscriber base came from Asia, particularly South Korea and Japan. The service now wants to work harder in India.

"The number of subscribers in the United States has remained stable, which shows the saturation of Netflix in the country," observed analyst Ross Benes of eMarketer.

With this slowdown "the increase in incomes will undoubtedly come from an increase in prices," he added.

The platform recently increased its prices slightly in Canada, from $ 14 to $ 15 per month for the "standard" option and from $ 17 to $ 19 for the premium option. In the United States, free trials have disappeared.

Asked about this during the analyst conference, the leaders of the group did not give a firm answer.

"If we do a good job and deliver more value, with more and more original productions (...) then there may be an opportunity, occasionally, to ask members to pay a little more in certain countries" , however admitted Greg Peters, the platform's chief operating officer.

The Disney + Offensive

The move could seem daring as its new, very young, but already major, rival Disney + offers subscriptions from $ 7 per month in the United States. For $ 13, Hulu and ESPN + (sports) are included.

However, the streaming service launched by the entertainment empire already has 60 million subscribers worldwide, 10 months after its launch.

At Netflix, which doesn't have the vastness of Disney catalogs, prices start at $ 9 (lower resolution and one screen). For $ 16 a month, users get super high definition and up to 4 simultaneous screens.

But the company is showing confidence. On the one hand, it has greatly benefited from physical distancing measures, despite the emergence of major competitors during the same period, including Disney +.

On the other hand, its production services are operational again "almost everywhere in the world", despite the pandemic, and all the releases scheduled for 2021 have been confirmed.

And from mid-November, she can count on the third season of "The Crown", a series on the reign of Elizabeth II, to increase the counters.

"We compete with so many other services, (the app) TikTok and YouTube, as well as HBO or (the game) Fortnite," said Reed Hastings, the group's boss.

"For us the criterion is the quality of our offer and how often, how many evenings you say to yourself 'Oh my god I really want to see the last series on Netflix'".

The platform now has just over 195 million subscribers worldwide. In the fourth quarter, it expects to win 6 million new paid subscribers, again below the 8.8 million accumulated from October to December 2019.

Its revenue was slightly higher than analysts' forecast, at $ 6.4 billion, and its net profit reached 790 million, from 665 million a year ago.

"The pandemic and its consequences continue to make all projections very uncertain, but if the world recovers in 2021 as we hope, we are banking on growth at a level comparable to those before the Covid-19", specifies the group.

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