Love isn't the only thing going blind on Netflix. With 9.3 million subscribers added in its first-quarter earnings report on Thursday, the streaming giant also revealed it would stop sharing quarterly membership numbers starting in 2025.
“In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential. But now we are generating very substantial profits and free cash flow,” a letter to shareholders said. “We're also developing new revenue streams like advertising and our add-on membership feature, so members are just one component of our growth.”
Netflix also announced that another metric would be dropped from reporting in 2025: ARM, or average revenue per member, defined as “streaming revenue divided by the average number of paid streaming subscriptions divided by the number of months in the period.” according to the letter .
“Ultimately, we believe this is a better approach that reflects the evolution of the business,” co-CEO Greg Peters said on an earnings call, referring to the company's shifting priorities from membership growth to revenue and benefits.
After enjoying steady subscriber growth for years, Netflix lost 200,000 subscribers in early 2022, and in July of that year, he had lost almost a million month. After an accompanying share price drop, the streamer released a cheaper, plan with advertising support and gained almost 9 million subscribers from the previous year by the end of 2022.
Subscriber growth increased every quarter in 2023, the same year Netflix clamped down password sharing i increased prices for some of its customers, with 13.1 million more added by the end of the year. The streamer brought in another 9.3 million in the first quarter of 2024, according to its most recent earnings report.
“The reason we focus on engagement is because we believe it's the best indicator of member satisfaction with our offering,” co-CEO Ted Sarandos said on the call. “Happy members watch more, stay longer, tell friends, which increases engagement, revenue and profits – our north stars.”
The streamer is also moving into live sports, acquiring the rights to begin broadcasting WWE Raw in 2025 and exclusively star of social networks Jake Paul boxing match with Mike Tyson in July.
Deadline reported earlier this month that a small number of layoffs were expected as the company reorganized its film department.
