Netflix Faces Slowing Subscriber Growth as Focus Shifts to Revenue and Advertising

Netflix is poised to report its slowest subscriber growth in over a year, as the effects of its recent password-sharing crackdown begin to diminish. According to industry estimates, the streaming platform is expected to have added around 4 million subscribers during the July to September quarter. Hits like The Accident and The Perfect Couple ranked among the most-watched shows in the U.S. during this period, according to Nielsen data.

With subscriber growth slowing, Netflix is shifting its attention to other key performance metrics, including revenue growth and profit margins. Starting in 2025, the company plans to stop disclosing subscriber numbers altogether, a strategic move to emphasize financial strength over pure user counts. Jeff Wlodarczak, an analyst at Pivotal Research, remarked, “Netflix aims to maintain subscriber growth while leveraging its scale to increase prices and boost advertising revenue.”

The company’s ad-supported subscription tier has seen some growth, although Netflix has yet to share detailed financial results for this service. Analysts don’t expect advertising to become a significant revenue driver until 2026, causing some investor concerns about Netflix’s overall growth outlook. eMarketer analyst Ross Benes highlighted the issue, stating, “Their U.S. ad revenue is under a billion dollars annually, which is underwhelming given their size.”

Some analysts believe Netflix may need to further adjust its pricing strategy, possibly by phasing out more ad-free plans to push users toward its ad-supported option, which generally offers higher revenue per customer. In July, Netflix took a significant step by discontinuing its $9.99 basic ad-free plan for new subscribers in the U.S. and UK, with plans to gradually phase it out for existing users.

Currently, Netflix charges $6.99 per month for its ad-supported tier, while the standard ad-free plan costs $15.49. Notably, the company hasn’t raised the price of its standard plan since early 2022, and the ad-supported plan has retained its initial pricing since its launch in late 2022.

For the third quarter of this year, Netflix is expected to report ad revenue of approximately $242.7 million, with overall revenue projected to grow by 14.3% to $9.76 billion—a slightly slower pace compared to previous quarters. To attract more advertisers, Netflix is focusing on live events, including the upcoming Jake Paul vs. Mike Tyson boxing match in November and its first-ever NFL games in December. Additionally, the highly anticipated second season of Squid Game, set to release in December, could help drive subscriber growth in the year’s final quarter.

Despite the current challenges, Netflix’s stock has outperformed the broader market. Since its second-quarter earnings report in July, Netflix shares have gained 12.4%, surpassing the S&P 500’s 5% rise over the same period. As Netflix navigates this evolving landscape, its upcoming financial report and future strategies will be closely watched by investors and industry insiders alike.

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