Netflix adds subscribers but revenue projection falls short

"The Deepest Breath" production directed by Laura McGann on Netflix

Netflix beat analyst forecasts in earnings released late Wednesday evening as a password-sharing crackdown and an ad-suported option helped bring in 5.9 million new streaming subscribers in the latest three months. 

However, revenue came in slightly below predictions for April through June, as did Netflix's projection for revenue in the current quarter just started. The company said it expected revenue growth to accelerate in the second half of the year.

"While we’ve made steady progress this year, we have more work to do to reaccelerate our growth," the company said. Its nearly 6 million subscriber additions outpaced the 1.9 million that analysts had expected.

Netflix has been looking for new ways to make money as streaming competition intensifies and it nears market saturation in the US. The company launched a cheaper tier with advertising last November, and started asking password borrowers to pay in a widespread crackdown that rolled out in May. 

The company has also stopped offering its lowest-priced ad-free plan in the US and in Britain. Netflix is pursuing a twofold strategy to accelerate revenue growth: Its offering new customers a tier that includes advertising and cracking down on password sharing.

Quarterly revenue climbed 2.7% from a year earlier to $8.2bn. The company estimated third-quarter revenue would hit $8.5bn, which compares with forecasts of $8.7bn.  

The company, like its competitors, is grappling with strikes by Hollywood actors and writers, although analysts say Netflix has an advantage because of its global production.

Meanwhile, Tesla reported revenue in the April-June period of $24.93bn, compared with expectations for $24.48bn, after CEO Elon Musk doubled down on the price war. Reuters