Movie streaming giant, Netflix is expected to report slower subscriber growth for the April-June period, adding around 4.82 million new users, following its crackdown on password-sharing, and viewers’ shifting attention to summer sports events like the Euro football tournament.
Despite fewer new subscribers, the fewest in five quarters, Netflix’s lower-priced ad-supported tier has been very successful, more than doubling ad revenue in the June quarter. Overall, Netflix’s revenue is expected to rise 16.4% to $9.53 billion, the fastest growth since the second quarter of 2021.
Popular shows like Bridgerton and Baby Reindeer helped Netflix stay on top of the most-watched charts in the second quarter.
In May, Netflix announced that its ad-supported tier had 40 million monthly active users globally, making up 40% of all new sign-ups in areas where it is available, up from 23 million in January. This success has been well-received by investors, with Netflix’s stock up nearly 35% this year, compared to a 19% rise in the S&P 500 index.
Seasonal factors like summer travel and the upcoming Olympic Games, starting on July 26, are expected to impact viewership for Netflix and its competitors, such as Disney+. Despite this, Netflix continues to draw viewers with both its original content and popular shows like NCIS and Grey’s Anatomy.
Netflix has also formed bundling partnerships to offer more value. For example, Comcast offers Netflix with its Peacock streaming service and Apple TV+ for its Xfinity internet and TV customers. Additionally, Netflix is hosting more live events, including streaming two NFL games on Christmas Day, to attract more advertisers.
To support future growth, Netflix announced plans in May to build its own ad technology platform, providing marketers more ways to buy and measure ads. Initially, Netflix relied on Microsoft to develop the ad tier’s technology.
