The streaming giant Netflix has said it will stop reporting quarterly subscriber numbers with its 2025 earnings, instead focusing on other metrics.
Netflix also said on Thursday it will cease reporting the average revenue per member, otherwise known as ARM.
“As we’ve noted in previous letters, we’re focused on revenue and operating margin as our primary financial metrics — and engagement (i.e. time spent) as our best proxy for customer satisfaction. In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential. But now we’re generating very substantial profit and free cash flow (FCF),” Netflix said in its earnings release.
The streaming giant said it will also focus on new revenue streams and other features.
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“We are also developing new revenue streams like advertising and our extra member feature, so memberships are just one component of our growth,” it said. “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.”
Netflix said it will still report “major subscriber milestones” if they cross them while not specifying the parameters of those milestones. As THR noted, moving away from the subscriber metric will prove significant to the company’s overall bottom line when considering it “had been a focus area for Wall Street early in the streaming wars, and can remain so, particularly when profits are not yet in sight.”
As Breitbart News reported, Netflix has continued to solidify its position as the king of streaming, pulling in 13 million new subscribers in 2023’s final quarter, and adding another 9.3 million in 2024’s quarter one. In fact, quarter four proved to be the second-best in the streaming service’s history for subscriber signups just behind its massive bump during the coronavirus pandemic of 2024.
In its statement at the time, the company attributed the spike in subscribers to its hard crackdown on password sharing.
“We believe we’ve successfully addressed account sharing, ensuring that when people enjoy Netflix they pay for the service too,” it said.
(L-R) Nicole Avant and CEO of Netflix Ted Sarandos attend the 2024 Netflix SAG Celebration at Chateau Marmont on February 24, 2024 in Los Angeles, California. (Emma McIntyre/Getty Images for Netflix)
“We have gotten to the point where paid sharing is just something that we do,” co-CEO Greg Peters said on the company’s earnings call.
As Netflix continues asserting its dominance in the streaming space (something no other company has been able to compete with), the streaming giant said that it will likely see other studios licensing more of their titles. In the tail-end of 2023, for instance, a large number of Warner Bros. and DC titles suddenly appeared on the platform. Disney and NBCU and Paramount will likely follow suit.
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