![\"bythenumbers\"](\"http:\/\/redmonk.com\/rstephens\/files\/2016\/06\/bythenumbers.jpg\")
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(Photo credit: Flickr\/morebyless<\/a> under CC-BY 2.0)<\/span><\/sup><\/sub><\/p>\n Netflix released their third quarter results on October 17, 2016. The shareholder letter<\/a> begins by crediting the company\u2019s quarterly streaming revenue of over $2B in part to its \u201cstrong content slate including Stranger Things and the second season of Narcos.\u201d However, the story was more nuanced in the earnings interview<\/a> with the Netflix executive team.<\/p>\n CEO Reed Hastings focused some of his early commentary on the broader forces driving subscriber growth. While he also cited the success of Netflix\u2019s original content as a contributing factor, he advised against focusing on the \u201cmicrovariables\u201d behind subscriber growth (\u2018net adds.\u2019) In Hastings\u2019 view, strong original content is only a small driver of annual net adds. He instead attributed much of the subscriber growth to the overall media landscape. Hastings referenced the \u201cfundamental growth cycle\u201d related to \u201cthe deep force that\u2019s changing the market as people get used to internet television.\u201d<\/p>\n This quarter Netflix reported<\/a> 46.5M paid U.S. streaming subscribers. The company added .4M new U.S. subscribers this quarter and 2.8M net adds year-to-date. These numbers are contextually impressive.<\/p>\n In Q2 2016, SNL Kagan<\/a> estimated there were 95.7M total residential video subscribers in the United States. That\u2019s 95.7M aggregate subscribers across all traditional cable, satellite, and telco video providers (and does not include online video providers like Netflix.) Furthermore, traditional video providers have a weak trajectory. In total they lost .8M subscribers between Q1 and Q2 2016, and in fact haven\u2019t had a positive quarter for collective net adds since Q1 2014.<\/p>\n This means that as a rough rule of thumb, for every two households in the U.S. that have a traditional paid tv subscription with any<\/strong> provider there is one household with a Netflix streaming subscription. This is not to say that there is no overlap between these groups; many people have both. Rather, this is to give a sense of scale behind Netflix\u2019s substantial penetration in the market.<\/p>\n Another area of interest from Netflix\u2019s earnings release was the executive team\u2019s commentary around the company\u2019s global reach. Netflix launched in more than 130 countries<\/a> early in 2016 and is now available in 22 languages<\/a>. Hastings cited YouTube\u2019s 50 language offerings as the company’s competitive benchmark in this area.<\/p>\n While there is continued effort to provide more content in local languages, it was interesting to hear about the reach of existing programs. While declining to give country-specific details, CFO David Wells confirmed the company\u2019s success was due to \u201cbroad-based performance across multiple markets.\u201d Chief Content Officer Ted Sarandos said, \u201cour big series that we had going on in the quarter \u2013 Luke Cage, Stranger Things, The Get Down, and Nacros, of course \u2013 performed proportionately well globally. The content is traveling in a way that we\u2019d hoped.\u201d<\/p>\n We at RedMonk can anecdotally attest to this phenomenon, as we\u2019ve now expressed our collective love for Stranger Things via our conferences on two continents.<\/p>\n46.5M<\/h2>\n
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