When you look at Netflix’s decision to end quarterly reporting of subscriber numbers, I think they realize that they have reached a peak in subscriber numbers.
On Thursday, Netflix released a glowing report showing the streaming service gained 9.3 million new subscribers in the first quarter of 2024, bringing its total global subscriber count to 269.6 million. .
This is an embarrassing number for second place Disney+. Disney Grooming Syndicate has 149.6 million subscribers worldwide. But a peak is a peak, and companies are all about growth.
Netflix also reported total revenue of $9.37 billion and earnings per share of $5.2 billion last quarter, which beat Wall Street expectations. However, Netflix has since announced that it will no longer publish quarterly subscriber numbers starting in 2025. Streamers will also stop reporting average revenue per member (ARM), another metric that Wall Street values.
“As we have stated in previous letters, we are focused on revenue and operating margin as our key financial metrics and engagement (i.e. time spent) as the best indicator of customer satisfaction,” Netflix said in a statement. It is stated in the report. “In our early days, when we had very little revenue and little profit, membership growth was a strong indicator of our future potential. But now we are generating very strong profits and free cash flow.”
Wall Street said that’s fine, but these subscriber numbers tell us about the future.
Netflix doesn’t make many mistakes in its innovative approach to entertainment. Netflix single-handedly changed the way we watch TV, won the streaming wars, and is the only streaming company that hasn’t lost billions of dollars. But the decision not to report subscriber numbers was a mistake, and Wall Street is letting Netflix know it.Streamer’s stock fell despite great quarterly report hit:
Netflix shares on Friday fell for the first time in nine months, as a weak revenue outlook and a warning that the streaming giant would stop reporting subscriber numbers in 2025 overshadowed a strong start to the year. became.
Shares fell as much as 8% to $562 at the start of trading in New York. This was the steepest decline since July last year. The stock has risen 25% since the beginning of the year through the close of regular trading on Thursday.
Netflix’s refusal to release subscriber numbers says a lot about the fact that it feels it has reached a peak in the number of subscribers it can attract. After all, everything possible is being done to entice people to subscribe. After losing subscribers a few years ago, Netflix responded by eliminating password sharing and adding cheaper slots that included ads. That was helpful. Subscribers increased and stock prices recovered. Okay, but what should I do…? What else can Netflix do to grow its subscription base?
I don’t see anything other than adding live sports. I did everything I could. At some point, you’ll be selling your product to everyone who might want to buy it.
Affirmative action on cable TV is disappearing. The billions of dollars Hollywood has forced 100 million American households to pay $150 a month for hundreds of channels we’ll never watch is coming to an end. Streaming is performance-based. I will only buy your product if I like it. Netflix has dominated its competitors so far, but the days of Hollywood making money by producing content no one watches are thankfully coming to an end. With cable TV, it was easy to make money by raising prices. Customers had nowhere else to go. Not so with streaming. Wall Street and Hollywood are watching and bingeing on peak Netflix.
John Nolte’s first and last novel. borrowed time, winning five star rave From daily readers.You can read an excerpt here and a detailed review here.Also available in hard cover upon Kindle and audio book.
