XML 20 R9.htm IDEA: XBRL DOCUMENT v3.21.2
Revenue Recognition
 6 Months Ended
Jun. 30, 2021
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
The Company's primary source of revenues is from monthly membership fees. Members are billed in advance of the start of their monthly membership and revenues are recognized ratably over each monthly membership period. Revenues are presented net of the taxes that are collected from members and remitted to governmental authorities. The Company is the principal in all its relationships where partners, including consumer electronics (“CE”) manufacturers, multichannel video programming distributors (“MVPDs”), mobile operators and internet service providers (“ISPs”), provide access to the service as the Company retains control over service delivery to its members. Typically, payments made to the partners, such as for marketing, are expensed. However, if there is no distinct service provided in exchange for the payments made to the partners or if the price that the member pays is established by the partners and there is no standalone price for the Netflix service (for instance, in a bundle), these payments are recognized as a reduction of revenues.
The following tables summarize streaming revenue, paid net membership additions (losses), and paid memberships at end of period by region for the three and six months ended June 30, 2021 and June 30, 2020, respectively:

United States and Canada (UCAN)
As of/ Three Months EndedAs of/ Six Months Ended
 June 30, 2021June 30, 2020June 30, 2021June 30, 2020
 (in thousands)
Revenues$3,234,643 $2,839,670 $6,405,615 $5,542,446 
Paid net membership additions (losses)(433)2,935 15 5,242 
Paid memberships at end of period (1)73,951 72,904 73,951 72,904 
Europe, Middle East, and Africa (EMEA)
As of/ Three Months EndedAs of/ Six Months Ended
 June 30, 2021June 30, 2020June 30, 2021June 30, 2020
 (in thousands)
Revenues$2,400,480 $1,892,537 $4,744,154 $3,616,011 
Paid net membership additions188 2,749 1,998 9,705 
Paid memberships at end of period (1)68,696 61,483 68,696 61,483 

Latin America (LATAM)
As of/ Three Months EndedAs of/ Six Months Ended
 June 30, 2021June 30, 2020June 30, 2021June 30, 2020
 (in thousands)
Revenues$860,882 $785,368 $1,697,529 $1,578,821 
Paid net membership additions764 1,750 1,121 4,651 
Paid memberships at end of period (1)38,658 36,068 38,658 36,068 

Asia-Pacific (APAC)
As of/ Three Months EndedAs of/ Six Months Ended
 June 30, 2021June 30, 2020June 30, 2021June 30, 2020
 (in thousands)
Revenues$799,480 $569,140 $1,561,894 $1,052,800 
Paid net membership additions1,022 2,657 2,383 6,259 
Paid memberships at end of period (1)27,875 22,492 27,875 22,492 
(1) A paid membership (also referred to as a paid subscription) is defined as a membership that has the right to receive Netflix service following sign-up and a method of payment being provided, and that is not part of a free trial or certain other promotions that may be offered by the Company to new or rejoining members. A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date. Voluntary cancellations generally become effective at the end of the prepaid membership period. Involuntary cancellations, as a result of a failed method of payment, become effective immediately. Memberships are assigned to territories based on the geographic location used at time of sign-up as determined by the Company’s internal systems, which utilize industry standard geo-location technology.
Total U.S. revenues, inclusive of DVD revenues not reported in the tables above, were $3.0 billion and $6.0 billion, respectively, for the three and six months ended June 30, 2021, and $2.7 billion and $5.2 billion, respectively, for the three and six months ended June 30, 2020. DVD revenues were $46 million and $96 million, respectively, for the three and six months ended June 30, 2021 and $62 million and $126 million, respectively, for the three and six months ended June 30, 2020.
Deferred revenue consists of membership fees billed that have not been recognized, as well as gift cards and other prepaid memberships that have not been fully redeemed. As of June 30, 2021, total deferred revenue was $1,187 million, the vast majority of which was related to membership fees billed that are expected to be recognized as revenue within the next month. The remaining deferred revenue balance, which is related to gift cards and other prepaid memberships, will be recognized as revenue over the period of service after redemption, which is expected to occur over the next 12 months. The $69 million increase in deferred revenue as compared to the balance of $1,118 million for the year ended December 31, 2020 is a result of the increase in membership fees billed due to increased members and average monthly revenue per paying member.