While Netflix continues to grow, it missed analyst expectation on subscriber growth. "The company finished the quarter with 28.6 million paid domestic customers, a shade behind Time Warner Inc.'s
HBO, which had 28.8 million as of March 31, according to SNL Kagan." Still, Netflix is growing revenue Having "reported profit of $29 million, or 49 cents a share, a nearly five-fold increase from the same period a year ago." The stock market is not what you have done but what you can do and investors are worried that subscriber growth will slow and profits will decline as Netflix finances more original content for its pipeline. Yet Netflix should shortly pass HBO in total subscribers.
Like HBO, Netflix relies on subscription revenue to grow. Both must handle churn and marketing support to retain current customers. But Netflix might be able to add an advertising revenue stream if done in a non-intrusive way. While I am not suggesting pre-rolls on streaming content to subscribers, perhaps the Netflix website could expand to showcase native and display advertising as well as previews with pre-roll. Extra featurettes to shows and other added content could potentially come with sponsorship advertising. And certainly future licensing of original series to other platforms could return some of the investment from the production. These may be outlier advertising efforts but it augments the revenue growth without interfering with subscriber enjoyment of their content views.
