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Is Netflix’s Decision To Stop Reporting Subscriber Numbers A Case Of Smoke And Mirrors?

In a surprise move, Netflix announced last week that it would stop announcing subscriber numbers from 2025.

Investors punished that decision with its stock stepping off a ledge and falling 9 per cent on Friday.

Never mind that Netflix had, in fact, announced that it had added 9.33 million customers in the first quarter of this year, taking its subscriber base to nearly 270 million – up 16 per cent during the past 12 months. Also, its operating income climbed 54 per cent with revenue rising to US$2.6bn, up from US$1.7bn a year ago.

The company claims that they are shifting its focus to engagement — the amount of time its subscribers spend on the service — and developing new sources of revenue including advertising. “Memberships are just one component of our growth,” a recent letter to shareholders claimed.

Other tech majors have also previously taken a stance not to report certain metrics of their business. In 2018, Apple said it would no longer report the number of iPhones, Macs and iPads sold each quarter.

More recently, in February this year, Facebook, Instagram and WhatsApp owner Meta too said it would no longer report subscriber numbers to its apps, which now total almost 4 billion people who use Instagram, Facebook and WhatsApp each month. It also won’t provide daily or monthly user numbers for its Facebook app.

Netflix’s rapid recent growth in subscriber numbers can be attributed to a crackdown on password sharing and the addition of new content. Netflix said it generated strong engagement in the first quarter from subscribers in markets such as Australia.

In November, last year, Netflix said that in the previous four years (2019-2023), it invested over A$1 billion on new Australian and Australian-related Netflix films and shows. This includes over A$500 million on new kids and young adult programming, and over A$450 million on new adult drama. 

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