Netflix has reportedly added the lowest number of subscribers this April-June quarter when compared to the statistics in the past five quarters. The most reasonable logic behind this sudden dip in subscribers is the strict crackdown on password-sharing and the shift of viewers' attention from Netflix to summer sporting events such as the Euro soccer tournament. According to LSEG data, Netflix registered around 4.82 million new subscribers in the second quarter. This is the lowest addition since the first quarter of 2023.
According to Nielsen data, Netflix's original series like the historical romance "Bridgerton" and the limited series "Baby Reindeer," which delves into comedian Richard Gadd's encounter with a stalker, dominated the most-watched charts in the second quarter.
Netflix's Success With Its Low-Priced Ad-Supported Plan
The streaming giant has been working hard to sell its lower-priced ad-supported tier and it will be safe to say that it has yielded strong ad revenue growth. As per reports, the ad revenue of the company is likely to have more than doubled in the June quarter. If we talk about the overall revenue, then it has likely risen 16.4 per cent to $9.53 billion. This marks the fastest growth since the second quarter of 2021.
Investors are keenly awaiting Netflix's second-quarter results, particularly focusing on its efforts to expand the ad-supported plan and seeking updates on new growth initiatives. In May, Netflix announced that its ad-supported tier had reached 40 million monthly active users worldwide, accounting for 40% of all sign-ups in available countries—a substantial increase from 23 million in January.
The market has responded positively to Netflix's advertising strategy, reflected in the company's stock rising nearly 35% year-to-date, outpacing the S&P 500 index's return of about 19%. However, analysts anticipate a potential impact on summer viewership trends as people engage in travel activities, compounded by the Olympic Games starting on July 26, which could draw viewers away from streaming services like Netflix.