Monitoring desk
ISLAMABAD/CALIFORNIA: Netflix Inc, an American subscription video-on-demand over-the-top streaming service company based in Los Gatos, California, is expected to report its slow quarterly revenue growth as its ad-supported plan struggles to attract customers in the saturating United States market, which may pressure the company to pull back on the content spending this year.
According to Reuters, the streaming pioneer has been reeling under strained consumer spending, increasing costs of financing products, and increased competition from Disney+ and Amazon Prime.
It has pinned its hopes on the launch of the ad-supported tier, but analysts said they have yet to see a burst of subscriptions.
Dwindling Netflix subscribers
The company is expected to have added 4.5 million subscribers in the fourth quarter, the lowest addition for the holiday period since 2014. It added 8.3 million subscribers the previous year.
Analysts said that the $6.99 per month ad-supported plan needs access to all titles and is not cheap enough to win over important numbers of customers in Canada and the United States.
Jamie Lumley, an analyst at Third Bridge, said: “Looking at the market’s saturation, and the variety of options available, the pricing is not necessarily important below the competition and there have some challenges in attaining those subscriber targets.”
This is likely to draw focus on Netflix’s aggressive content spending, which Spencer Neumann, the finance chief, said in July 2022 would total about $17 billion annually for the next years.
