In the first quarter of 2023, Netflix Inc is expected to report adding approximately 2 million, new subscribers. Investors will be closely watching to see if the recent price cuts and the launch of an ad-supported plan have incentivized people to subscribe and remain with the service.
While the company lost 200,000 subscribers in the same quarter last year, it returned to subscriber growth in the second half of 2022. However, the pace of additions has slowed significantly, and Netflix is now seeking ways to generate revenue from the 100 million users who do not pay for the service.
To address this, the streaming giant has started cracking down on password-sharing in some countries. Though this measure may prompt some people to cancel their subscriptions, analysts predict they will likely return to the service. They also suggest that the crackdown could have a “more meaningful impact” in the June quarter, leading to an increase of more than 10 million new subscribers as the company converts free users to paid ones.
Refinitiv has polled 16 analysts who expect Netflix to add 3.43 million subscribers in the April-June period. In comparison, the company experienced 970,000 subscriber losses in the same quarter last year. For the quarter that ended March 31, the company is expected to have added a net 2.07 million subscribers, compared to a drop of 200,000 subscribers in the year-ago quarter. Netflix itself no longer provides forecasts for subscriber growth.
Refinitiv expects Netflix to post nearly 4% revenue growth in the first quarter, marking the company’s second-slowest growth ever after a nearly 2% rise in the December quarter.
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