The
only profitable major streamer, Netflix has resisted joining
rivals like Walt Disney in hiking ad-free prices this year and
instead curbed password-sharing outside households to tap the
more than 100 million viewers who use its service without
subscribing.
"Netflix now closely resembles a utility in many markets,"
analysts at Bernstein said. "The challenge of being labeled a
utility is how a maturing company continues finding growth."
It could hike prices after the end of the Hollywood actors
strike, a media report said earlier in October.
Five months after calling a strike that plunged Hollywood into
turmoil, the Writers Guild of America (WGA) last week approved a
new contract with major studios.
Netflix, however, has weathered the strike well thanks to its
larger international presence and strong content slate.
After a slow start for the ad plan launched last year, analysts
said they expect Netflix will raise prices of its ad-free
options in the coming months to nudge more subscribers to the
other tier, where commercials help bring in more revenue per
user.
So far, most viewers subscribing to Netflix after the password
crackdown have opted for the ad-free plans, analysts said. Its
standard plan with ads costs $6.99 a month, while the ad-free
plans start at $15.49.
"Using these tactics, Netflix will likely double its
ad-supported viewership next year," said Insider Intelligence
analyst Ross Benes. He expects Netflix to show more ads to users
over time, catching up with rivals.
The ad tier is expected to bring in some $188.1 million in
revenue in the third quarter ended September, with subscriber
additions of 2.8 million, according to Visible Alpha estimates.
Overall, Wall Street expects the streamer to post its strongest
quarterly subscriber additions this year, according to LSEG
data.
Revenue in the third quarter likely rose 7.7% to $8.54 billion,
the fastest growth in five quarters, thanks to strong
programming that included the latest seasons of "Sex Education"
and "Virgin River".
(Reporting by Samrhitha Arunasalam in Bengaluru; Writing by
Aditya Soni; Editing by Sayantani Ghosh and Devika Syamnath)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|