Netflix to Stop Reporting Subscriber Numbers By 2025; Tells Wall Street to Just Focus on Profits

By Thea Felicity

Apr 19, 2024 09:47 AM EDT

Members Of SAG-AFTRA And WGA Go On Strike At Netflix, Sunset Gower And Paramount Studios — LOS ANGELES, CALIFORNIA - JULY 19: The Netflix logo is displayed at Netflixoffices on July 19, 2023 in Los Angeles, California. Members of SAG-AFTRA, Hollywood's largest union which represents actors and other media professionals, have joined striking WGA (Writers Guild of America) workers in the first joint walkout against the studios since 1960. The strike could shut down Hollywood productions completely with writers in the third month of their strike against the Hollywood studios. Netflix is set to report second quarter earnings after the closing bell today.
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Netflix has announced its intention to stop reporting quarterly membership numbers and average revenue per membership starting in the first quarter of 2025, per CNBC.

The streaming giant's decision to stop reporting quarterly subscriber numbers marks a notable shift in focus away from the traditional battleground of attracting customers, which has been central to their competitiveness known as the "streaming wars."

What Netflix Will Report In 2025 Instead

Instead, Netflix aims to redirect investor attention towards metrics that executives believe better represent customer satisfaction, such as revenue, earnings, and free cash flow, in a shareholder letter. By doing so, Netflix seeks to emphasize its financial performance as a key indicator of its success and stability in the industry.

While some investors may express concerns over reduced transparency, Netflix's decision signifies its evolution as a dominant force in the streaming industry, prioritizing financial performance as it matures as a company.

"But now we're generating very substantial profit and free cash flow (FCF). We are also developing new revenue streams like advertising and our extra member feature, so memberships are just one component of our growth."

Interestingly, this move coincides with Netflix's sustained growth and profitability, outpacing many legacy media companies and positioning itself as a leader in the evolving entertainment industry.

Besides, even after facing backlash for increasing subscription tiers, a recent report from VCPost shows that Netflix already exceeded projections with their subscriber numbers in quarter one of 2024 alone.

"In addition, as we've evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact."

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