Netflix recently announced its Q1 2024 earnings report. The streaming giant noted that it topped expectations in terms of adding subscribers, gaining 9.33 million during that time and reaching almost 270 million subscribers around the world. However, despite surpassing Wall Street expectations, Netflix has announced that it will no longer be reporting subscriber numbers in 2025.
While subscriber counts did go up, Netflix shares dropped more than 4.5% in after-hours trading. In its Q1 report to shareholders, Netflix said that engagement, which is measured in time spent on the platform, is the "best proxy for customer satisfaction." Therefore, it will no longer be reporting quarterly membership or average revenue per member. Netflix will be announcing "major subscriber milestones as we cross them."
Subscriber growth continues to increase around the world for Netflix, with the U.S. and Canada netting 2.53 million customers in the first quarter of this year. Understanding that overtime, subscriber numbers will begin to plateaus, the company is hoping to reorient its investors to view other metrics like time-spent-viewing, as a way to determine success. Co-CEO Greg Peters mentions that since Netflix has a paid-sharing model which allows primary users to add "extra members" for an incremental fee, the number of subscribers will not be as accurate. As far as ads go, with more emphasis on viewing time, Netflix aims to promote the idea that higher engagement can be attached to higher revenue per member.
Netflix will continue to share the breakout revenues by region in each quarter and add a guidance for annual revenue moving forward. It remains to be seen how this will affect Netflix's business plan down the line.
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