Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
NEWS

Netflix’s efforts to grow ad tier in focus as subscriber growth slows

Published On :

By Harshita Mary Varghese

(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.

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.

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.

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.

The ad push has resonated with investors. For the year, Netflix’s stock is up nearly 35%, compared with a return of about 19% on the S&P 500 index.

Seasonally, viewership during summer months for Netflix and its rivals such as Disney+ also takes a hit as people travel. This year, the Olympic Games that begin on July 26 are also expected to draw some viewers away from Netflix, according to analysts.

AD FOCUS

After investing heavily in originals, brokerage MoffettNathanson noted Netflix is also able to drive viewership with its competitors’ content. Eighteen of the top 20 streamed titles were acquired shows, such as “NCIS” or “Grey’s Anatomy,” it noted.

Netflix has also announced bundling partnerships. Comcast is offering Netflix with its Peacock streaming service and Apple TV+ for its Xfinity internet and TV customers.

Netflix is also hosting more live content, including its deal to stream two National Football League games on Christmas Day, to create advertiser-friendly events.

“More live-event announcements will ensue as the company looks to improve its ad-supported time spent, amid an industry-wide reduction in scripted content production,” Ross Benes, senior analyst at Emarketer, said.

To drive the next phase of growth, Netflix announced plans in May to build an in-house ad technology platform that will offer marketers more ways to buy commercials and measure their performance. It initially leaned on Microsoft to build the backbone of the ad tier.

“Despite this progress, we continue to view advertising as a longer term story and do not expect a material revenue contribution until 2025,” BofA Global Research analyst Jessica Reif Ehrlich said in a note on Monday.

 

(Reporting by Harshita Mary Varghese in Bengaluru and Dawn Chmielewski in Los Angeles; Editing by Sayantani Ghosh and Shounak Dasgupta)

Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts