Date : 19-04-2024
Netflix will only announce its significant subscriber milestone achievement going forward; it will no longer reveal its subscriber count. According to Netflix, this is what it started doing because it believes that the number of subscribers doesn’t accurately represent the company’s expansion.
Netflix said, “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). We are also developing new revenue streams like advertising and our extra member feature, so memberships are just one component of our growth. 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.”
This can be problematic for investors since the shares of Netflix have been low for some time now, and topping it all, it won’t be providing the subscriber count for investors to keep a tab on.
Netflix announced to the world that it had lost one million subscribers two years prior. Following this, investors began highlighting how crucial it is to concentrate on the profits rather than the subscribers.
This quarter, Netflix earned a whopping $2.3 billion on revenue of $9.4 billion, making it a huge profit after years of loss-making.
The strategy of not telling about the business has also been used by giants like Google, which has made their stocks reach an all-time high.
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