Wells Fargo is raising its second quarter net additions estimate from 1.5 million to 2.1 million, according to a note from analyst Steven Cahall this week.
Investors will also watch for any details Netflix provides on its recently launched cheaper, ad-supported tier. Netflix introduced both the new sharing policy and ad tier in the last year as part of its response to its first subscriberthat it removed its "basic" ad-free plan, making its standard plan with ads its cheapest option at $6.99 a month. The standard and premium tiers without commercials cost $15.49 and $19.99, respectively, a month.
Netflix's stock has risen with the rollout of these initiatives. The company's shares have climbed more than 60% this year, and it notched a 52-week high on Tuesday amid expectations it would show growth this quarter.During its pitch to advertisers in May, Netflix unveiled few details about its ad-supported tier, albeit enough to. The company said it had 5 million active users for the new tier, and 25% of its new customers were signing up for the tier in areas where it's available.
Also top of mind during the earnings will be the effects of the Hollywood writers and actors' strikes. As the media industry finds itself going through one of its mostperiods in years, actors recently joined writers on the picket line, all but shutting down Hollywood. Netflix is expected to fare better than other media companies during the strike due to its deep bench of content, particularly from international sources.
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