This post was originally published on this site
https://i-invdn-com.investing.com/news/LYNXNPEF0H0BE_M.jpg
The second half of 2023 is projected to mark the commencement of accelerated growth for Netflix, as indicated by the company’s management. This forecast comes in the wake of sluggish year-over-year growth rates for Netflix, which recorded 1.9%, 3.7%, and 2.7% for 4Q 2022 and the first and second quarters of 2023 respectively.
One key driver behind this anticipated growth is the continued implementation of a paid account-sharing strategy. This plan aims to monetize over 100 million users who currently borrow Netflix accounts by offering them ways to transfer their profiles, user experiences, and viewing preferences into paid subscriptions. However, the process is still in its formative stages and will unfold over several quarters.
Simultaneously, Netflix is set to tap into its emerging advertising business as another significant catalyst for revenue growth. Despite being in its early “crawl” phase, management sees this sector as a promising avenue for long-term growth. Advertising revenue is expected to constitute at least 10% of Netflix’s overall revenue eventually.
With Netflix’s trailing 12-month revenue exceeding $32 billion, the potential scale of its advertising business could be considerable. The year 2024 is slated to witness an expansion in Netflix’s advertising capabilities coupled with a surge in advertiser demand.
However, it was highlighted that these future plans are not the sole drivers for boosting top-line growth. Management emphasized that they expect growth acceleration to kick off from the second half of 2023 itself, indicating that other strategies might also be in play.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
