With viewer focus shifting to summer athletic events like the Euro soccer tournament and substantial gains following a crackdown on password sharing, Netflix probably attracted the fewest new members in five quarters between April and June.
Based on LSEG data, the corporation added an estimated 4.82 million users in the second quarter. That would represent roughly half of the 9.3 million additions it added in the preceding three months and the lowest additions since the first quarter of 2023.
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.
Investors will closely examine the streaming behemoth’s efforts to add advertising to its more affordable plan when it releases its second-quarter earnings on Thursday. They will also be looking for information on fresh growth drivers.
The business reported that in May, its ad-supported tier had increased from 23 million in January to 40 million monthly active users worldwide, accounting for 40% of all sign-ups in the countries where it was accessible.
Investors are receptive to the advertising campaign. Compared to the S&P 500 index, which has returned roughly 19% for the year, Netflix’s stock has increased by almost 35%.
Seasonally, as more people travel throughout the summer, Netflix’s and its competitors’ like Disney+ experience a decline in viewership.
