What's happened
Netflix has announced it will stop reporting key subscriber numbers from next year, while also revealing it added 9.3 million customers in the first quarter of 2024, bringing its total subscribers to almost 270 million.
Why it matters
Netflix's shift in reporting strategy indicates a focus on profitability and financial metrics over subscriber growth. This move could impact investor sentiment and provide insights into the company's evolving business model and growth prospects.
What the papers say
Netflix's decision to stop reporting subscriber numbers has raised concerns among investors about the company's future growth prospects. While some view this as a strategic shift towards profitability, others worry it may signal limited growth potential. Bank of America highlights the lack of visibility into key performance indicators as a contributor to negative stock reactions. Third Bridge's Jamie Lumley questions the growth prospects of Netflix's subscriber base following this announcement.
How we got here
Netflix's decision to stop reporting key subscriber numbers aligns with a broader trend among tech giants like Meta and X, who have also ceased reporting monthly active user numbers as growth slowed. The company's focus on profitability and revenue reflects a shift in strategy towards maximizing existing user revenue streams through initiatives like ads and password-sharing crackdowns.
Common question
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Netflix, Inc. is an American technology and media services provider and production company headquartered in Los Gatos, California. Netflix was founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California.
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