With investors finding new ways to judge how well a service is performing, average revenue per user is one measure being talked up by execs as subscriber gains become more elusive.
“Netflix is at a different phase of growth compared to rivals,” Paolo Pescatore, analyst at PP Foresight, says. “It is by far a more mature business in subscription video business. Hence, why it places greater emphasis on growing ARPU.”
Competitors are now talking up pricing and ARPU upside. “Our current ARPU is almost $8 globally, comprised of nearly $11 domestically and almost $4 internationally,” Warner Bros. Discovery’s global streaming chief, JB Perrette, said during an Aug. 4 earnings call.
“A key surprise is that Disney is not launching its ad-supported tier at a lower price point,” highlighted Goldman Sachs analyst Brett Feldman in a report, referencing Disney+’s $7.99 a month cost, with ads, starting in December. “As such, there is no risk of ARPU dilution from subscribers downgrading.”
Part of the increased focus on ARPU is that subscriber growth has slowed too. In the latest quarter, domestic subscriber additions for Netflix, Walt Disney, Warner Bros. Discovery, Paramount, NBCUniversal and AMC Networks came in at an aggregate of only 2.7 million, a MoffettNathanson report noted.
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