What a difference a year makes for Netflix. During 2022’s second-quarter earnings report, the streamer revealed that it had lost subscribers for the second straight quarter, sounding alarm bells across the industry. Twelve months later, Netflix has re-solidified its place atop the streaming heap.

That position could become even more secure on Wednesday, July 19, when Netflix is expected to release its Q2 earnings report for 2023. According to Media Play News, Wedbush Securities analyst Michael Pachter forecasts that Netflix will announce it has added another 2 million global subscribers between the start of April and the end of June.

Industry guidance had suggested Netflix would add 1.75 million users in the quarter, so Pachter thinks the company will beat expectations. His reasoning is that better customer awareness regarding Netflix’s Standard with Ads plan and a muted negative reaction to new rules against password sharing have led to more new signups and fewer cancelations than previously predicted.

More users subscribing to the Standard with Ads plan will be a big gain for Netflix if Pachter’s prognostications are borne out. Streamers make more money off of ad-plan users than they do ad-free users because they get money from advertisers for those customers in addition to subscription dollars. Recent surveys have shown that Netflix lags behind Disney+ and Max in sign-ups for its ad-supported plan, but the company announced at its Upfronts presentation in May that the tier had 5 million global users.

There was ample reason to think that Netflix’s plan to crack down on password sharing would be a significant driver of churn. One study found that 35% of Netflix customers reported a willingness to cancel their service if password-sharing rules went into effect. But the guidelines were officially introduced in late May, and the churn tsunami has thus far not materialized.

Pachter says rules against password sharing combined with more subscribers on the Standard with Ads plan could boost Netflix’s average revenue-per-user (ARPU) by as much as $8. Considering Netflix already claims 232.5 million subscribers worldwide, getting 2 million more and a revenue bump of $8 per customer would be an impressive haul indeed for the world’s largest streamer.

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Netflix

Netflix is a leading subscription-based video streaming service that offers on-demand access to an extensive library of over 3,000 movies, 2,000+ TV shows, and a growing collection of acclaimed Netflix originals. Renowned for producing groundbreaking content, Netflix has become a cultural powerhouse with hit originals like “Stranger Things,” “Wednesday,” “Squid Game,” “The Crown,” “Tiger King,” “Bridgerton,” “The Witcher,” and “Black Mirror.”

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The platform constantly updates its catalog, introducing fresh content alongside timeless classics and international hits. Netflix’s commitment to storytelling has also earned critical acclaim, with award-winning exclusives such as “Roma,” “Marriage Story,” “The Power of the Dog,” “Mank,” and “Ma Rainey’s Black Bottom.” In 2023, their animated film “Guillermo del Toro’s Pinocchio” won an Academy Award for Best Animated Feature, further solidifying Netflix’s reputation for high-quality content.

Recently, Netflix has expanded beyond standard movies and TV titles with the addition of video podcasts, and is also exploring a digital store that would offer third-party streamers within the app.

Netflix offers three plans – stream on 2 devices in HD with the “Standard with Ads” ($8.99) plan, on 2 devices in HD with the “Standard” ($19.99) plan, and 4 devices in up to 4K on the “Premium” ($26.99) plan.

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