Netflix to stop reporting subscriber tally as streaming wars cool
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[April 19, 2024]
By Lisa Richwine and Dawn Chmielewski
LOS ANGELES (Reuters) -Netflix on Thursday unexpectedly announced that
it will stop reporting subscriber numbers each quarter, a decision seen
as a sign that years of customer gains in the streaming wars are coming
to an end.
Shares of the streaming video pioneer fell after it reported a large
batch of new customers in the first quarter but gave a revenue forecast
that missed analyst targets. The stock was trading at $585.41
after-hours, down 4.2% from its closing price.
Netflix said its ad-supported streaming plans helped attract 9.3 million
new customers, nearly double the consensus forecast of analysts polled
by LSEG. That brought its global total to 269.6 million at the end of
March.
Netflix executives have urged investors to focus on revenue and
operating margins when assessing the company's progress, rather than
customer additions. Netflix said it will stop disclosing subscriber
additions each quarter starting with the first quarter of 2025, and
instead will announce them only when major milestones are reached.
"This change is really motivated by wanting to focus on what we see are
the key metrics that we think matter most to business," co-Chief
Executive Greg Peters said in a post-earnings video.
Analysts said the decision to end quarterly reporting of subscriber
numbers would likely rankle investors and make it harder for Wall Street
analysts to model the company's business, going forward. They also said
it was unclear what would drive new sign-ups once Netflix has pulled in
as many users as possible from its crackdown on password sharing.
![](http://archives.lincolndailynews.com/2024/Apr/19/images/ads/current/chicagost_sda_SHG_2024.png)
"It might be a few more quarters of paid sharing benefits, but we don't
really know what the next catalyst will be after that for a member
addition," said Magalie Grossheim, senior equity research analyst at M
Science. "I think that's probably contributing also to why they're
deciding to stop reporting those numbers."
Other companies similarly have stopped reporting familiar metrics --
monthly active users, in the case of Meta's Facebook and social platform
X, previously known as Twitter -- as growth slowed.
"The movement to no longer disclose quarterly subscriptions from next
year will not go down well, more so given (subscriber) growth that the
streaming king has seen over the last year," said PP Foresight analyst
Paolo Pescatore.
Netflix shares have jumped 89% in the past year as it forged ahead of
competitors such as Walt Disney, which is still losing money on its
streaming business.
In a letter to shareholders, Netflix said it would fuel future growth by
working to improve the variety and quality of its entertainment and
scale its advertising business.
Netflix, which once eschewed commercials, is preparing to host its
second annual presentation to advertisers in New York.
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![](../images/041924PIX/ent_b.95.jpg)
Signage at the Netflix booth is seen on the convention floor at
Comic-Con International in San Diego, California, U.S., July 21,
2022. REUTERS/Bing Guan/File Photo
![](http://archives.lincolndailynews.com/2024/Apr/19/images/ads/current/ldn_lda_BUSDIRCOVER_2024.png) Co-CEO Ted Sarandos said he was
"really excited" to share the upcoming slate, which includes new
seasons of the period drama “Bridgerton,” the post-apocalyptic drama
“Sweet Tooth,” and upcoming unscripted events such as a roast of
retired NFL quarterback Tom Brady.
"This is an opportunity to re-engage with advertisers and look at
the fundamentals of what our offering is,” including improvements in
measurement, Peters said.
Netflix began offering subscribers ad-supported plans, at a cost
less than half commercial-free options, in November 2022. That
provided a low-cost option for those affected by Netflix's 2023
crackdown on password sharing, as it sought to convert users of
accounts of friends or family into paying subscribers.
The company said the ad-supported service now accounts for 40% of
all sign-ups in markets where it offers the plan.
Netflix earnings per share for January through March came in at
$5.28, beating analyst expectations of $4.52.
Revenue rose 14.8% to nearly $9.4 billion during the period, when
the service debuted titles such as sci-fi drama series "3 Body
Problem" and crime thriller "Griselda."
Operating income totaled $2.6 billion, a year-over-year increase of
54%.
Looking ahead, the company projected revenue of $9.49 billion for
the current quarter, shy of analyst expectations of $9.537 billion.
To satisfy its large global audience, Netflix has been broadening
its programming. It is expanding its sports offering with a $5
billion, 10-year deal to stream WWE's wrestling show, "Raw,"
starting in January 2025.
Sarandos challenged recent reports that Netflix aimed to make fewer,
better films under its newly installed film chief, Dan Lin.
"Just to be clear, there is no appetite to make fewer films,”
Sarandos said. “But there is an unlimited appetite to make better
films, always. Even though we have made and are making great films,
we want to make them better – of course."
(Reporting by Lisa Richwine and Dawn Chmielewski in Los
AngelesAdditional reporting by Harshita Mary Varghese and Aditya
Soni in BengaluruEditing by Kenneth Li, Peter Henderson, Matthew
Lewis and Leslie Adler)
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