What does a mature streaming service look like? Netflix is about to show us

Earnings Watch: Netflix expects its worst quarter but could follow many different paths when it reports results ahead of Intel and large airlines in this week.

Netflix Inc. proved to the world that streaming video could be a big business. Now it will show the world what that business looks like when it hits maturity.

Netflix's growth stage hit warp speed during the COVID-19 pandemic, then fell off in the first quarter after nearly a year of staggering growth. When the company reports second-quarter earnings on Tuesday, it has warned investors of the smallest number of net additions in its history.

While the stock plunged on that news three months ago, it should not have been surprising. Netflix has been giving hints that it was reaching the end of its early growth stage for years -- from admitting that competition will take a bite .

Netflix earnings preview: Can 'The Witcher' and other hot series lead Netflix to a second-half surge?

While analysts believe subscription additions will tick back up in the second half of the year, as new seasons of popular shows like "The Witcher" begin to air, it is unlikely Netflix will sport the type of subscriber growth investors have become used to. The fight is just getting harder as newer streaming services from the likes of Walt Disney Co., NBCUniversal and Apple Inc. add fresh content and continue to offer cheaper prices and free deals to woo new subscribers.

How does Netflix respond? Whatever co-CEOs Reed Hastings and Ted Sarandos do will establish what maturity looks like in streaming, and will need to generate growing revenue without counting on huge new subscriber additions to satisfy investors.

Netflix is expected to follow multiple paths.

Expect Netflix executives to address all those potential avenues in Tuesday's shareholder letter and earnings "conference call," along with the information that could drive second-half performance and consumer interest -- specific release dates for some of those hot shows.

For more context on the streaming boom and its effects on the traditional cable bundle, check out AT&T Inc.'s $(T)$ report for information on dwindling cable subscribers and the company's latest streaming gambit, a combination with Discovery