By Zainab Shafiq 
Slow subscriber growth will probably form the centrepiece of the discussion surrounding Netflix’s soon-to-be-released earnings report as analysts project that it will post the slowest subscriber growth in six quarters, adding a paltry 4 million new subscribers during the July-September period. The news comes at a very disturbing time since the crackdown on password-sharing sent subscriber growth soaring a few months ago.
The company’s crackdown on password-sharing first gave subscriber gains a boost, but that momentum has since tapered off. Now, investors are focusing on Netflix’s shift toward revenue growth and improving margins as subscriber numbers slow. In an attempt to drive profitability, Netflix has been experimenting with various strategies, including introducing an ad-supported tier and gradually raising subscription prices.
While Netflix’s ad business is growing, the company has not yet revealed financial details about its ad-supported tier. Analysts see Netflix’s ad sales only emerging as a viable growth driver after at least 2026. Given that, Netflix’s U.S. ad sales are still estimated to be in the range of only $1 billion annualized. That has led some experts to wonder whether the company’s long-term growth trajectory has been at risk. In fact, experts whisper that Netflix may have to increase prices or eliminate ad-free options to get more customers to subscribe to its ad-supported plan.
The pricing strategy by Netflix has not gone without changes over the past year. Last July 2022, for one, the internet giant had to end the $9.99 ad-free basic plan for new U.S. and UK subscribers. At an affordable $6.99 monthly, its cheapest plan is still its ad-supported one. In contrast, a standard plan is an ad-free one that costs $15.49 per month-a price point since early 2022.
Given slowest subscriber growth is becoming more evident for Netflix, newer avenues are thrust into the limelight to engage advertisers and look at higher revenue. First off, there are the live events-for example, Jake Paul vs. Mike Tyson’s boxing match this November; eventually, NFL games in December interest viewers and potential engagement will be keen.
An early December release for “Squid Game” Season 2 could help drive subscriber additions into the fourth quarter but is unclear whether this will offset Netflix’s slowing growth in subscribers. As the company reports it will cease issuing subscriber growth going forward from 2025, instead of subscriber growth, the push will be toward revenue growth and ad-supported content, in defining Netflix’s future strategy.
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