Netflix $NFLX (NFLX), which is firmly holding the reins as the dominant streaming platform, is set to report its third quarter earnings on Thursday afternoon. But with subscriber gains expected to slow down, some analysts are predicting an imminent price hike and a growing shift toward advertising from the streaming giant.
In its last two quarterly earnings reports, Netflix has continuously warned of a potential dip in subscribers as increases from its password-sharing crackdown are starting to wane.
The net increase in Netflix’s paid memberships for the third quarter is expected to reach nearly 3.5 million, a decline from 8.8 million during the same period last year, according to a consensus estimate from FactSet (FDS).
The company has also said that it plans to stop reporting subscriber stats all together starting in 2025, signaling a shift in focus from subscriber growth to profit.
For users these could potentially mean a price increase, more ads, and more live event programming, according to analysts.
“Investors are likely to need to see evidence of pricing leverage in 2025 to make up for slowing account growth,” wrote Raymond James $RJF (RJF) analyst Andrew Marok in a note on Oct. 15.
He added, that the company won’t need to to outline specific plans for a price hike this quarter, but investors will be hoping to see some progress by early next year.
The last time Netflix raised prices was in October 2023.
Another way Netflix can maintain its profit goals is by relying on more revenue from advertising. Netflix first debuted ad-supported plans in 2022.
Alicia Reese of Wedbush Securities said the company’s advertising efforts could become a primary growth driver in 2026.
“The most significant benefit of the ad tier so far is that it limits churn. We think Netflix is positioned to accelerate ad tier revenue contribution into year-end and 2025 as it improves its advertising solutions and targeting, utilizes new partnerships, and adds more live events,” Reese wrote in a note from Oct. 14.
And one way Netflix is courting advertisers is via more live event programming.
“Advertisers want to be part of big cultural moments. Compelling live programming will always amass and unite people for a snapshot in time. For brands, that’s a captive audience who’s ripe for advertising messages,” said Forrester (FORR) vice president and research director Mike Proulx.
Netflix has experimented with live programming in the past and has some upcoming events in the pipeline like the highly anticipated Jake Paul vs. Mike Tyson boxing fight this November and NFL games on Christmas.