Analysts and investors will be watching Netflix subscriber numbers closely when they come Tuesday.
Investors are eager to learn whether Netflix's advertising tier (which is over a year old) is and other changes made by the streaming giant will pay off during it's Q4 earnings call on Tuesday.
Netflix has long led the streaming sites in subscribers, and following a brief post-pandemic hiccup in 2022 when its numbers briefly flagged, the streamer has only increased its lead over upstarts like Disney+ and the more established Amazon Prime Video and Hulu.
During third quarter, Netflix reported adding almost 8.8 million subscribers, bringing its worldwide total to 247 million. Maintaining that level of growth in such a wildly competitive environment (more than half a dozen strong streaming networks have launched over the past five years) might be unrealistic, yet Netflix has continued to post some of the biggest gains in the industry.
Analysts are still optimistic. TD Cowen's John Blackledge thinks Netflix is in for an even better quarter, adding 9.03 million. Steven Cahall of Wells Fargo
In addition to watching for the subscriber growth numbers, here are four other things to look for from Tuesday’s Netflix fourth quarter earnings call.
1. Subscriber Growth For The Ad-Supported Tier
Netflix launched its ad-supported option more than a year ago, and the company said it would take time for churn to settle in order to get a realistic idea of the tier’s success. Now that we’re a year past the launch and other streamers (most recently Amazon Prime Video) have followed suit into ads, investors want to know how many people are using the ad-supported tier and if they’re sticking with it.
2. Response To Recent Price Hikes
Netflix raised the price of its Basic plan at the end of last year. It marked the second time in a year that the streamer had raised prices, and it will be interesting to see if that sparked a slowdown in new signups or impacted numbers in any other way.
3. Password Crackdown Updates
Also last year, Netflix began a crackdown on password sharing, claiming that millions of people were using the service by piggybacking on accounts owned by friends or family. It’s hard to say definitively whether this sparked the bigger signup numbers in third quarter, but investors are following the subscriber ups and downs closely to see if password crackdowns might be paying off.
4. Strike Impact, If Any
Analysts agree that the broadcast and cable networks, which have a more established fall show launch pattern and generally less content, were more impacted by the writers’ and actors’ strikes, which hobbled Hollywood for months over the summer and fall.
