Here is the number of Netflix subscribers (hidden from next year)
The number of Netflix subscribers continues to grow in the first quarter of the year. However, stocks tumbled on Wall Street after the streaming giant said it would no longer report user growth data
The advance of Netflix subscribers continues but from 2025 we will no longer be aware of it.
The US video streaming giant published its quarterly report: Netflix added 9.33 million customers, with a 16% increase in the number of subscribers, which reached 269.6 million, against the 264.2 million expected. This quarter's numbers, however, will be among the last available to investors, given that the company has announced that, starting next year, it will no longer provide quarterly data on subscribers or even average revenue per user.
As the company has reached saturation in several mature markets, it is starting to generate more revenue from its existing users through things like ads and crackdowns on password sharing, Axios highlights.
Despite a better-than-expected quarterly, shares fell 4% in the after-hours after the streaming pioneer said it would stop disclosing subscriber numbers and shift focus to viewer engagement. Netflix stock has gained approximately 27% since the beginning of the year and 85% in the last twelve months. The "hard year" 2022 therefore seems to be over, when the company had lost more than a third of its market value after revealing that its ten-year growth spurt had come to an end.
The video-on-demand company said it is focusing on new metrics to account for changes in its business model. However, he specified that he will continue to announce "when we exceed significant thresholds in terms of subscribers".
All the details.
REVENUES GROWING
Netflix reported first-quarter 2024 revenue grew 15% year-over-year, or 18% on an exchange-neutral (F/X) basis, driven primarily by user growth and pricing.
PROFITS BEAT EXPECTATIONS
In the first quarter of 2024, the company reported earnings per share of $5.28 on revenue of $9.37 billion, versus expectations for $4.52 on revenue of $9.28 billion, up from $8.16 billion in a year earlier. Net income was 2.33 billion, or 5.28 dollars per share; a year earlier, it had been $1.30 billion, or $2.88 per share.
Operating profit was $2.6 billion (compared to $1.7 billion in the first quarter of 2023), a year-over-year increase of 54%.
THE POSITION OF THE VIDEO STREAMING COMPANY
“Our two priorities in advertising are expanding our member base and developing our capabilities for advertisers,” reads the letter to shareholders. “We made progress on both fronts in the first quarter. Our advertising subscription grew 65% quarter-over-quarter (after increasing nearly 70% sequentially in each of the 3'23 and 4'23 quarters) with more than 40% of all signups in our advertising marketplaces coming from our advertising plan".
However, the level of advertising is still tiny compared to online video giants like YouTube, Bloomberg points out.
THE ADVERTISING STRATEGY AND THE SQUEEZE ON PASSWORD SHARING PAY
Netflix said its ad-supported streaming plans helped attract 9.3 million new customers, nearly double analysts' consensus forecasts. This brought the global total to 269.6 million at the end of March.
Not to mention that the crackdown on password sharing also helped the streaming service beat Wall Street's earnings forecasts.
NETFLIX WILL STOP REVEALING THE NUMBER OF SUBSCRIBERS
However, Netflix will now stop reporting the number of quarterly paid subscriptions and revenue per subscriber, starting in the first quarter of 2025. “These metrics have long been the primary way Wall Street has evaluated Netflix's performance. company, but Netflix has tried to shift attention to traditional measures such as sales and profit,” reports Bloomberg .
The Los Gatos company is also investing in new lines of business, such as games and live programming, to improve user engagement. At the beginning of the year, Netflix announced a partnership with TKO Group Holdings, the company that controls World Wrestling Entertainment (Wwe), an American wrestling entertainment company, under which the platform will broadcast Raw, WWE's main wrestling program . The 10-year deal is worth more than $5 billion and marks Netflix's entry into major sports and live entertainment events. These products may generate different types of revenue opportunities in the future, such as more ads or in-app purchases.
ANALYSTS COMMENT
According to Paolo Pescatore, founding analyst of PP Foresight, Netflix's decision to no longer reveal quarterly subscriptions starting from 2025 "will not go well", reports the Financial Times.
“Regardless of the company's attempt to shift focus from subscribers to financials, net [subscriber] additions are the key metric everyone wants to see,” Pescatore said. “Even more so when you consider the subscriber growth that the streaming king has seen over the last year.”
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/ecco-la-carica-degli-abbonati-di-netflix-celata-dallanno-prossimo/ on Fri, 19 Apr 2024 14:14:39 +0000.