(Reuters) – Netflix likely added the fewest number of subscribers in five quarters during April-June as sharp gains following a crackdown on password sharing ebbed and viewer attention moved to summer sporting events including the Euro soccer tournament. Netflix is strategically focusing on expanding its ad-supported tier amidst a slowdown in subscriber growth.
The company added an estimated 4.82 million subscribers in the second quarter, according to LSEG data. That would be the lowest additions since the first quarter of 2023 and about half the 9.3 million it added in the previous three months. #NetflixAdTier
Still, the streaming giant’s efforts to sell a lower-priced ad-supported tier have yielded strong ad revenue growth. The company’s ad revenue is expected to have more than doubled in the June quarter.
Overall revenue likely rose 16.4% to $9.53 billion, marking the fastest growth since the second quarter of 2021.
Netflix’s original shows such as the historical romance “Bridgerton” and the limited series “Baby Reindeer” – based on comedian Richard Gadd’s experience with a stalker – topped most-watched charts in the second quarter, according to Nielsen data. #NetflixAdTier
When it reports second-quarter results on Thursday, investors will scrutinize the streaming giant’s efforts to expand its lower-priced plan with advertising and look for updates on new growth drivers.
In May, the company said its ad-supported tier reached 40 million monthly active users across the globe and accounted for 40% of all sign-ups in the countries it was available, up from 23 million in January.
Netflix seeks to maintain its competitive edge in a crowded streaming market. The shift towards an ad tier by Netflix reflects changing consumer preferences and the evolving landscape of digital content consumption.
