Netflix's 'less compelling' content may offset paid subscriber tailwinds
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Netflix (NASDAQ:NFLX) is slated to report second-quarter results later this month and although the company is boosting ways to better monetize its platform, "less compelling" content may curb growth, investment firm Monness, Crespi, Hardt said.
Analyst Brian White, who has a neutral rating on Netflix (NFLX) shares, said he is expecting a 7% sequential rise in subscribers to 235.6M, or 3.1M additions, with streaming revenue of $8.265B. While the subscriber gain is above Wall Street's expectations, it's been below historical seasonality, as over the past six years, the company has added an average of 3.9M subscribers. 
A consensus of analysts expect the company to earn $2.85 per share on $8.27B in revenue.
"As the June quarter progressed, we felt the content on Netflix became less compelling, possibly a function of seasonality, or other factors," White wrote in an investor note. "The Hollywood writersâ strike is an obstacle for the industry, and this may have already driven Netflix to manage its content slate more judiciously."
White added that Netflix (NFLX) is likely better positioned than its competitors to manage the disruption from the writers' strike, but it may need to be "frugal" in releasing new content. 
Despite the dearth of new, compelling content, Netflix (NFLX) rolled out the availability of paid sharing in the U.S. for $7.99 a month on May 23, with the company rolling out the initiative on a broad basis during the quarter.
Looking ahead, White is expecting Netflix (NFLX) to forecast $8.589B in revenue and $3.09 per share in earnings, compared to Wall Street's estimates of $8.652B and $3.21 per share in earnings. 
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