Streaming video service giant Netflix will release its third-quarter financial report on Thursday. Driven by the policy of restricting account sharing, Netflix is expected to increase its number of subscribers by about 6 million in the third quarter. In addition, the industry also generally expects Netflix to increase subscription service prices in the coming months.
Netflix is the only major streaming company to be profitable, but it has not joined rivals such as Disney in raising the price of its ad-free subscription this year. Instead, Netflix is trying to attract the more than 100 million people who use its service but don't subscribe by limiting account sharing outside the home.
In this regard, Bernstein analysts said: "Today, Netflix is very similar to a utility company. But the challenge of being labeled a 'utility company' is: how to continue to achieve growth for an already mature company."
There were reports earlier this month that Netflix would raise prices in multiple markets around the world in the months following the end of the Hollywood actors' strike, with the United States and Canada bearing the brunt. This means that Netflix is likely to announce a price increase at its earnings conference this week.
In July of this year, Hollywood suffered its first simultaneous strike by writers and actors since 1960. Last week, the Writers Guild of America (WGA) approved previous deals with a number of major studios, including Netflix. Under the agreement, Netflix, Disney+, Hulu and other streaming services will share streaming data with the WGA, allowing writers to see the popularity of their content.
Netflix launched an ad-supported subscription service last year, but progress has been slow. Analysts say Netflix is expected to raise prices on its ad-free subscription service in the coming months.
Analysts say that after the ban on account sharing was introduced, most Netflix viewers chose ad-free subscription services. Netflix starts at $6.99 per month with ads, while ad-free service starts at $15.49.
Ross Benes, an analyst at research firm Insider Intelligence, said: "Through these strategies, Netflix may double the number of subscribers to its ad-supported service next year. Like its competitors, Netflix will also show more ads to users over time."
Data analysis platform VisibleAlpha predicts that in the third quarter ending in September, advertising-based subscription services will bring Netflix about $188.1 million in revenue, and the number of subscribers will increase by 2.8 million.
LSEG data shows that Wall Street generally expects the number of new Netflix subscribers in the third quarter to hit a new high this year.
Wall Street expects Netflix's third-quarter revenue to reach $8.54 billion, a year-on-year increase of 7.7%, the largest increase in five quarters.