1/ Netflix Earnings Report Thread - Q3 of 2020
Hypothesis: Netflix subscriber growth was low due to a weak content slate in the most recent quarter.
Hypothesis: Netflix subscriber growth was low due to a weak content slate in the most recent quarter.
2/ Netflix guided to 2.5 million subscribers, which they were under by .3 million, at 2.2. (The street was estimating 3M.)
I don't care about estimates, though, because why set expectations on expectations? For me, the question is growth: is it slowing or accelerating.
I don't care about estimates, though, because why set expectations on expectations? For me, the question is growth: is it slowing or accelerating.
3/ Honestly, this chart looks like slowing. It's got high growth regular, then 2020 starts to hop around like toddler drawing an "M". 
4/ Which of course screams "Bass Diffusion" to me.
Especially the UCAN numbers.
Who was it who said Netflix would end up with 65-70 million or so US subscribers?
Especially the UCAN numbers.
Who was it who said Netflix would end up with 65-70 million or so US subscribers?
6/ My goal is to dig into everything we know about Netflix content and how that drives subscribers.
I've collected every #datecdote Netflix has released. Instead of finishing all the charts, I'm going to make them in real time and publish here.
entertainmentstrategyguy.com/2018/12/04/int…
I've collected every #datecdote Netflix has released. Instead of finishing all the charts, I'm going to make them in real time and publish here.
entertainmentstrategyguy.com/2018/12/04/int…
7/ Hopefully it doesn't blow up your thread that way.
BTW, I'll try to get an article up with the thoughts, but if you'd like it for your publication, send me an email/DM.
BTW, I'll try to get an article up with the thoughts, but if you'd like it for your publication, send me an email/DM.
8/ Start with the "summarize the data set". We have 65 data points, which is still "small". Oh so small. But starting to get close to statistical significance in total.
Unfortunately, each quarter is still small.
Unfortunately, each quarter is still small.
Actually, this is prettier:
(With the table below.)
(With the table below.)
9/ How about country of origin?
Well, its USA all over.
77% of all Datecdotes are USA, more if you count English language and Witcher, which is a USA/Poland joint.
Well, its USA all over.
77% of all Datecdotes are USA, more if you count English language and Witcher, which is a USA/Poland joint.
10/ This quarter was 100% USA, with 11 datecdotes about US productions.
11/ So I told you was excited about this quarter's earnings because Nielsen is providing weekly top ten data points.
So now I can take EVERYTHING Netflix tells us and sanity check it.
Get excited!!!
So now I can take EVERYTHING Netflix tells us and sanity check it.
Get excited!!!
12/ So I just finished adding countries of origin to all the Netflix datecdotes and Nielsen data points.
And here's the thing, the Nielsen US viewership is even more skewed to the US:
And here's the thing, the Nielsen US viewership is even more skewed to the US:
13/ Thats small, but 98% of the viewing in the United States using my 15 weeks of data is from a US production, with the other two shows being a Canadian show (practically US) and UK show.
14/ And we're back. Time to update some old charts.
So, the curious thing for my thesis is that film wise, it sounds pretty good that Netflix had 3 films get 70MM+ views.
Here's the look at viewership over time:
So, the curious thing for my thesis is that film wise, it sounds pretty good that Netflix had 3 films get 70MM+ views.
Here's the look at viewership over time:
15/ Again, this is real time, so it's slow to make. But here's another look, this time a version of a scatter plot:
16/ And last, by averages.
Then I'll go over some notes on this data.
Then I'll go over some notes on this data.
17/ These are film only. I like film because it tends to be cleaner than TV series. I trust the correlation between 2 mins viewed and complete much more than a TV series.
(Experience bears that out too.)
So in general, this quarter is very "okay".
(Experience bears that out too.)
So in general, this quarter is very "okay".
18/ Yes, it's easier for Netflix to get 70 million viewers on a film, but the current 70 million is the old 40 million.
Meaning Enola Holes has 76 million viewers at 2 minutes viewed, and that's 37% of Netflix's total sub base.
Meaning Enola Holes has 76 million viewers at 2 minutes viewed, and that's 37% of Netflix's total sub base.
19/ But the Highway Men had 40 million views at 70% completion, which translates to 54 million 2 minutes viewed.
Which was 36% of Netflix's total subscriber base at the time.
Which was 36% of Netflix's total subscriber base at the time.
20/ In short, Netflix didn't hit a grand slam with films this quarter, but hit 3 home runs.
And in entertainment, it's winner take all.
And in entertainment, it's winner take all.
21/ Want to see for yourself. Here's my conversion table with this quarter's film datecdotes.
22/ Using these numbers, we can think of this factoid like this:
22/ The 4 top series on Netflix this quarter--again, they usually tell us all the top series--got these global averages:
23/ So if a show *only* got 25% of Indian subs, then a few million more globally, basically it didn't register.
24/ So as I go through this data, I'm looking for insights, and this seems to be it:
Netflix's global content strategy isn't really working.
Netflix's global content strategy isn't really working.
25/ It's a country-by-country strategy. Which is fine, but crucially it means that scale doesn't generate increased returns.
26/ Well, first typo pointed out to me. I grabbed Q4's estimated subscriber numbers, instead of the current 195 million.
So disregard the percentages above.
So disregard the percentages above.
26/ Quick updates:
27/
• • •
Missing some Tweet in this thread? You can try to
force a refresh
