* Exclusive third-party data suggests Netflix could mark another strong quarter for subscriber growth when it reports on July 16, after demolishing subscriber targets last quarter.
* The rate of Netflix cancellations declined internationally during the second quarter, new data from analytics firm SimilarWeb that was shared exclusively with Business Insider suggests.
* SimilarWeb tracks traffic on Netflix's registration and cancellation page — the main channel were subscribers can terminate their service — and estimates changes in Netflix's net paid subscribers based on the data.
* SimilarWeb's model estimates that a 26% year-over-year decline in cancellations, coupled with a 3% boost in international sign-ups, could boost international paid net subscriber additions during the second quarter.
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Netflix could mark another strong quarter for subscriber growth when the company reports on July 16, after demolishing subscriber targets last quarter, exclusive third-party data suggests.
Fewer international cancellations could buoy Netflix's paid net subscriber growth during the second quarter of 2020, new data from analytics firm SimilarWeb that was shared exclusively with Business Insider suggests. Netflix's international subscriber base is its largest and fastest-growing.
SimilarWeb, which tracks traffic on Netflix's desktop registration and cancellation pages, found that international visits to the Netflix desktop cancellation page — the main channel where subscribers can terminate their plans — were at their lowest levels during the second quarter of 2020 since 2018.
International cancellations fell 26% year-over-year during the second quarter, SimilarWeb estimated based on its model that factors in visits and engagement on Netflix's desktop site. The model includes 15 indicator countries where Netflix has large or growing audiences, such as Brazil, Canada, France, India, New Zealand, and the UK.
Netflix's estimated pace of international cancellations dropped during the second quarter compared with the first quarter, when cancellations declined an estimated 11% year-over-year.
SimilarWeb's model estimates that the decline in cancellations, coupled with a 3% year-over-year boost in international sign-ups, could drive up international paid net subscriber additions as much as 31% compared with a year earlier.
The report comes after Netflix far surpassed its subscriber-growth targets for January to March, as "stay-at-home" orders began going into effect and people turned to streaming video to entertainment themselves in lockdown. The company brought in an astounding 15.8 million paid subscribers globally, more than it ever gained in a single quarter.
Netflix told investors at the time not to expect a subscriber lift like that again.
"Hopefully, progress against the virus will allow governments to lift the home confinement soon," the company said in its quarterly letter to shareholders. "As that happens, we expect viewing and growth to decline."
Still, the company forecasted it would add 7.5 million paid subscribers globally during the second quarter, more than double the 2.7 million net additions it garnered a year earlier. And, three months later, many people are still spending more time at home, as much of the world cycles through the various stages of reopening.
Analysts seem optimistic Netflix can surpass its target again. Markets Insider reported that Goldman Sachs expects Netflix to report "well above guidance" with at least 12.5 million net subscribers additions, based on its analysis of Netflix app download data from another analytics firm, SensorTower.
"We believe this was driven by growth in content on the platform, a lack of competition for entertainment hours and spend driving churn lower, and more time being spent at home even as a number of official orders have been lifted," Goldman Sachs analysts wrote in a July 10 note.
Netflix hasn't slowed down its content output, despite industry-wide production shutdowns that have driven some of its competitors to revisit their release cadence. The company said in April that most of its 2020 slate had already been filmed, and it didn't expect many changes to this year's release schedule.
"Space Force" from Greg Daniels and Steve Carell, Ryan Murphy's "Hollywood" and second season of "The Politician," Kenya Barris' "#BlackAF," Spike Lee's "Da 5 Bloods," and the Chris Hemsworth-starring "Extraction" all released during the quarter as planned.
In the US, where Netflix is facing competition from new streamers like HBO Max and Disney Plus, the SimilarWeb data suggests that Netflix's second-quarter subscriber growth could be driven more by an increase in sign-ups than declining cancellations.
SimilarWeb estimated that US sign-ups to Netflix rose 21% year-over-year during the second quarter, while cancellations increased a modest 5%, based on the firm's models.
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