Netflix is going beyond subscriber numbers. In its first quarter earnings results published on Thursday, netflix announced that it will stop reporting quarterly membership numbers in 2025 because subscribers are “just one component” of its growth. The move comes after a quarter in which it added 9.3 million subscribers, growing to more than 270 million members worldwide.
Subscriber numbers meant everything in the early days of streaming. It allows investors, studios, and everyone else to gauge how well a streaming service is doing compared to the competition, and Netflix has built on its leadership in that area.
But now, Netflix says it is changing this idea because it has multiple sources of income that do not depend solely on monthly memberships.
Its letter to shareholders highlights “new” revenue streams, including advertising through its ad-supported plan and paid sharing. “As we have evolved our pricing and plans from one to multiple tiers with different pricing depending on the country, each incremental paid membership has a very different business impact,” Netflix writes in its letter to shareholders. The streamer will also not report average revenue per member on a quarterly basis.
Instead, Netflix says it will provide a breakdown of revenue by region each quarter and reveal “major subscriber milestones” when they are reached. “Ultimately, we believe this is a better approach that reflects the evolution of the business,” Netflix co-CEO Ted Sarandos said during an earnings interview. “The reason we focus on engagement is because we believe it is the best indicator of member satisfaction with our offering, and it is a leading indicator of retention and acquisition over time.”
In other words, streaming is becoming more like cable. Instead of valuing people who sign up for its service, Netflix is betting that they will stay subscribed and maybe even pay to add an additional member.
(Disclosure: Vox Media Studios produced Fully functioning, and The edge He recently produced a series with Netflix).
Update April 18 at 4:55 pm ET: Added quote from Ted Sarandos.
