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Netflix faced its slowest quarterly growth in subscriber numbers in five quarters, adding approximately 4.82 million subscribers from April to June, a stark decline from the previous quarter's 9.3 million additions.

Reuters reported that the declining gains were mostly from cracking down on password sharing and viewer focus shifting to major sporting events like the Euro soccer tournament.

Despite this challenge, the streaming giant reported strong growth in its ad-supported tier, with ad revenue expected to more than double in the June quarter, contributing to an overall revenue increase of 16.4% to $9.53 billion, marking its fastest growth since 2021.

Most Viewed Netflix Shows Despite Slow Subscriber Growth

Popular original shows such as "Bridgerton" and "Baby Reindeer" topped viewership charts in the second quarter, according to Nielsen data.

Investors eagerly await the company's second-quarter results to assess its expansion efforts in the ad-supported segment and to gauge updates on new growth initiatives.

In May, Netflix reported that its ad-supported tier reached 40 million monthly active users globally and accounted for 40% of all new sign-ups in available markets, reflecting strong investor confidence with Netflix's stock up nearly 35% for the year, outperforming the S&P 500 index.

However, Netflix's decision to phase out its cheapest ad-free plan, as reported by VCPost, could potentially slow subscriber growth even further, as budget-conscious consumers may be discouraged from subscribing or renewing their memberships.

On the other hand, this move might push more subscribers towards Netflix's ad-supported tier, which the company aims to grow. If successful, the shift could boost ad revenue, offsetting the slower subscriber growth.

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