Netflix’s next era doesn’t need subscriber growth

The Future. Netflix’s decision to stop reporting subscriber numbers on a normal basis shows that the company has reached the scale that it no longer needs to worry about competitors and that a slowdown could send its stock barreling down as it did in April 2022. With Netflix having won the streaming wars when it comes to subscribers and profit, rivals may simply focus on engagement — how long people spend on the platform overall —as the most important gauge for streaming success.

Growth 2.0
After spurring all of Hollywood to compete for streaming subscribers, Netflix is ending the race.

• The streamer will no longer provide updated subscriber numbers during its quarterly earnings reports — it’ll only share them when they hit “certain major milestones,” per co-CEO Greg Peters.
• Instead, it’ll focus on the metrics that Wall Street now cares most about, like revenue, operating income, and overall engagement on the platform.
• Part of that reason is because the simple math of number of subscribers to revenue no longer makes sense — Netflix has multiple paid tiers, a growing ad tier, and may even change prices per market.

So far, Wall Street is wary of the plan, sending Netflix’s stock down 8% and suggesting that the company’s password crackdown has almost concluded juicing subscriber numbers… hence, the subscriber reporting pivot.

But if next quarter’s other metrics are good, subscriber counts will quickly be a distant memory.