• by Wayne Friedman , October 20, 2020

Although Netflix missed on analyst subscriber estimates -- pulling in 2.2 million new subscribers in its third-quarter reporting period -- this was not due to more competition from big-brand premium video platforms.

Netflix’s company press release says the result is largely attributable to over-delivering on subscriber successes earlier in the year -- adding 15.8 million subscribers in the first quarter and 10.1 million in the second quarter.

“We think this is primarily due to our record first half results... In the first nine months of 2020, we added 28.1 million paid memberships, which exceeds the 27.8 million that we added for all of 2019.

Stock market analysts were expecting around 3.3 million new subscribers in the period. Netflix had an estimated 2.5 million net additions

Netflix's stock price initially went down 5% in after-market Tuesday trading.

It also adds that though there was a slight miss on subscribers, “retention remains healthy and engagement per member household was up solidly year-over-year in third-quarter 2020.”

Netflix's revenue grew 23% to $6.4 billion in the period, with net income 19% higher to $790 million.

The company expects a 20% revenue increase in the next quarter to $6.6 billion, with subscribers posting a 6 million gain for the fourth-quarter period. There were 8.8 million subscriber additions in the fourth quarter a year ago.

Total paid global subscribers grew 23% in the third quarter to 195.15 million.

U.S. and Canadian subscribers inched up 180,000 to 73.1 million, although analysts were expecting flat results. Netflix's average revenue per user for U.S. and Canadian subscribers came in at $13.40 per month -- up 2% from a year ago.

Although recent launches from NBCUniversal Peacock (in July) and WarnerMedia HBO Max (in May) generated a great deal of media interest following the launch of Disney+ and Apple TV+ a year ago, Netflix says there is a bigger picture to consider:

“Competition for consumers’ time and engagement remains vibrant. Linear television and other big categories of entertainment, like video games and user-generated content from YouTube and TikTok are all vying for consumers’ attention and are strong drivers of screen time usage. We remain quite small relative to overall screen time.”