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    Home / News / Business News / Netflix to stop disclosing subscriber count from 2025
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    Netflix to stop disclosing subscriber count from 2025
    Netflix says engagement is a more accurate indicator of customer satisfaction

    Netflix to stop disclosing subscriber count from 2025

    By Mudit Dube
    Apr 19, 2024
    02:56 pm

    What's the story

    Netflix has recently announced its decision to stop revealing its subscriber count starting from the first quarter of 2025.

    This unexpected move was disclosed during the announcement of Netflix's first-quarter earnings for 2024.

    Despite gaining a significant 9.33 million subscribers during this period, bringing its global count to nearly 270 million, Netflix shares saw a drop of over 4.5% in after-hours trading on Thursday.

    New metrics

    Netflix to prioritize engagement over subscriber count

    In its letter to shareholders, Netflix stated that "time spent with the service," or engagement, is a more accurate indicator of customer satisfaction.

    Consequently, from Q1 2025, the company will no longer disclose quarterly membership numbers or average revenue per member (ARM).

    However, Netflix will continue to share "major subscriber milestones as we cross them" but will cease revealing quarterly subscriber figures.

    Strategy change

    Netflix's shift in evaluating company performance

    During the earnings call, co-CEO Greg Peters clarified that the total number of subscribers is no longer an accurate gauge for evaluating the company's performance.

    He cited Netflix's paid-sharing initiative, where primary account holders can include an "extra member" for an additional monthly charge, as a case in point.

    These "extra members" are not considered separate subscribers, further complicating subscriber count as a performance metric.

    Future metrics

    Netflix's to focus on revenue, operating margin, and engagement

    In its shareholder letter, Netflix revealed a shift in focus toward revenue and operating margin as key financial metrics and engagement as a measure of customer satisfaction.

    The company noted that membership growth was a strong predictor of future potential in its early stages when revenue and profit were minimal.

    However, now that substantial profit and free cash flow are being generated, memberships are just one aspect of their growth strategy.

    Financial transparency

    Netflix to continue providing revenue breakdown by region

    Netflix also announced plans to continue providing a breakdown of revenue by region each quarter and the foreign-exchange impact "to complement our financials."

    Going forward, annual revenue guidance will be included in existing forecasts for annual operating margin and free cash flow, as well as quarterly revenue, operating income, net income, and earnings per share.

    This move ensures continued transparency in the company's financial performance.

    Engagement report

    Netflix's biannual engagement report to showcase content performance

    In December of the previous year, Netflix published its inaugural "Netflix Engagement Report," which featured streaming performance metrics for licensed content.

    The company intends to release this data biannually to showcase the extensive engagement across a diverse range of content on its platform.

    "Success in streaming starts with engagement," Netflix stated in the shareholder letter, emphasizing the importance of viewer retention.

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