Netflix’s latest hit "Squid Game" has taken the streaming world by storm. According to Netflix Inc (NASDAQ: NFLX), "Squid Game" is the streaming giant's biggest series launch ever. The Korean thriller series outpaced hits such as "Tiger King," "The Queen’s Gambit" and "Bridgerton."
SimilarWeb Ltd (NYSE: SMWB) is a digital intelligence and data provider for companies and investors. Similarweb curated data within its Investor Intelligence department that gives insight into Netflix’s web traffic ahead of the company’s earnings report Tuesday afternoon.
“Squid Game, released Sept. 17, has proven to be a major global hit, driving sign up growth in the last week of September, and into October on a two-year basis. Meanwhile, cancelations remain in steady decline,” according to SimilarWeb’s data report.
SimilarWeb’s data gives investors insights into how many people are searching for Netflix and "Squid Game" online, as well as how many people are visiting Netflix’s registration page.
Ed Lavery, SimilarWeb's Director of Investor Intelligence, joined Benzinga's Power Hour on Monday to discuss the Netflix alternative data.
"We've been tracking this data, basically in real-time," Lavery said. "It's essentially a leading indicator in the sense that we get this data before financial results are published. In terms of the data industry, it is data that has already happened. It's basically getting visibility into companies in the present. We can actually see engagement on Netflix improving, which is one of the things we have been doing. We can use this engagement as a proxy for how many people are signing up and canceling for Netflix.
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Another aspect of what "Squid Game" adds to Netflix’s value is how strong the show is performing internationally.
“Internationally, Netflix is also seeing a strong uptick in engagement, and an easier lap vs the US. Much of the acceleration in engagement has come from the Asia Pacific region, though all markets have shown considerable strength in both usage and net sign ups in September-October. Our linear model, which is based on net sign ups, suggests modest acceleration in 3Q from 2Q that is generally in line with expectations, with strong momentum into 4Q,” SimilarWeb’s data report adds.
Bull Case: The popularity of "Squid Game" has driven new subscribers, and potentially has helped slow down cancellations. Netflix may report strong earnings and guidance given its market share in the streaming industry.
Bear Case: While "Squid Game" has undoubtedly been a driver of new subscribers and revenue for the Netflix, the company could potentially try and temper future expectations by saying that investors should not expect a "Squid Game"-type success every quarter.
Photo: A "Squid Game" screenshot courtesy Netflix.
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