(Reuters) – Netflix may report its slowest subscriber additions in six quarters on Thursday. Gains from the password-sharing crackdown have begun to ease. Investors will look for signs of growth in its new ad revenue business. Netflix faces challenges with its subscriber additions, as analysts expect a slowdown in Netflix subscriber growth. #NetflixSubscriberGrowth
Analysts estimate that Netflix added around 4 million subscribers during the July to September period. Popular Netflix originals like “The Accident” and “The Perfect Couple” ranked among the top streamed titles in the U.S.
As sign-ups slow, Netflix aims to shift investor focus to other performance metrics, including revenue growth and profit margins. The company plans to stop reporting subscriber data starting in 2025.
“Their focus is to continue to grow subscribers at a healthy clip while also leveraging their scale, ability to raise prices and increase advertising dollars,” said Pivotal Research analyst Jeff Wlodarczak.
Netflix’s ad-supported plan has shown growth, but the company has not provided details on its financial performance. Additionally, Netflix does not anticipate this tier becoming a major growth driver until 2026.
These factors have sparked concerns regarding Netflix’s overall growth trajectory moving forward.
“They’re making less than a billion dollars a year in the U.S. on advertising, saying that doesn’t make them look good,” eMarketer television and streaming analyst Ross Benes said.
Some analysts believe that Netflix should increase prices and reduce its ad-free plans. This change could encourage more customers to switch to the ad-supported tier, which generates higher revenue per user.
Last July, Netflix announced it would discontinue the $9.99 basic plan without commercials for new users in the U.S. and the UK. Furthermore, the company plans to phase out this option for existing subscribers.
In the U.S., Netflix charges $6.99 per month for its ad-supported tier. Meanwhile, its standard ad-free plan costs $15.49 per month.
Netflix has not increased the price of its standard plan since early 2022. Additionally, the price of its ad-supported tier has remained unchanged since its launch in late 2022. #NetflixSubscriberGrowth
Strategies for Sustaining Netflix Subscriber Growth Amidst Evolving Market Dynamics
Although this number appears strong, it marks a significant decrease from previous quarters. As a result, Netflix must focus on enhancing its content library and expanding its ad-supported plans to stimulate further Netflix subscriber growth.
Additionally, Netflix aims to shift its focus to revenue growth and profit margins. By doing so, it can reassure investors about its long-term potential. Ultimately, the company must continuously innovate to ensure sustainable Netflix subscriber growth while navigating evolving market dynamics.
