Netflix Will Stop Reporting Subscriber Numbers Next Year

Todd Spangler, reporting for Variety:

Netflix will no longer report subscriber numbers — which has been a key metric for streaming services for years — beginning with the first quarter of 2025.

The company made the announcement in releasing its first-quarter 2024 earnings Thursday. Netflix handily topped expectations for subscribers net adds, gaining 9.33 million in the period, to reach nearly 270 million globally. It also beat Wall Street expectations on the top and bottom lines. [...]

Despite the Q1 earnings beat, Netflix shares dropped more than 4.5% in after-hours trading Thursday, possibly as investors reacted negatively to the news that the streamer will stop reporting quarterly sub totals.

In its Q1 letter to shareholders, Netflix said that engagement — time spent with the service — is its “best proxy for customer satisfaction.” As such, it will no longer report quarterly membership numbers or average revenue per member (which it dubs “ARM”), as of Q1 2025. Netflix said it will announce “major subscriber milestones as we cross them” but will cease disclosing quarterly subscriber numbers.

I don’t think investors should be alarmed. This is what companies do when their growth phase is over. Apple used to break down unit sales for its various devices and stopped long ago. Netflix is no longer an up-and-comer — they’re the established leader in streaming, and should be judged accordingly. Keeping existing subscribers happy and watching is more important at this point than signing up new ones.

Thursday, 18 April 2024