Love isn’t the only thing that’s blind at Netflix. Touting a blockbuster 9.3 million added subscribers in its first quarter earnings report Thursday, the streaming giant also revealed that 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’re generating very substantial profit and free cash flow,” a letter to shareholders read. “We are also developing new revenue streams like advertising and our extra member feature, so memberships are just one component of our growth.”
Netflix also announced another metric would be left off of reports in 2025 — ARM, or average revenue per membership, defined as “streaming revenue divided by the average number of streaming paid memberships divided by the number of months in the period,” per the letter.
“Ultimately we think this is a better approach that reflects the evolution of the business,” Co-CEO Greg Peters said on an earnings call, referencing the company’s shifting priorities from member growth to revenue and profit.
After enjoying steady subscriber growth for years, Netflix lost 200,000 subscribers at the start of 2022, and by July of that year, it had lost almost a million more. Following an accompanying stock price dive, the streamer launched a cheaper, ad-supported plan and netted almost 9 million subscribers from the previous year by the end of 2022.
Subscriber growth increased each quarter in 2023 — the same year Netflix cracked down on password sharing and hiked prices for some of its customers — with another 13.1 million added by the end of the year. The streamer tacked on another 9.3 million in the first quarter of 2024, according to the most recent earnings report.
“Why we focus on engagement is because we believe it’s the single best indicator of member satisfaction with our offering,” Co-CEO Ted Sarandos said on the call. “Happy members watch more, they stick around longer, they tell friends, which all grows engagement, revenue, and profit — our north stars.”
The streamer is also moving into live sports, acquiring the rights to begin airing WWE Raw in 2025 and exclusively broadcasting social media star Jake Paul’s boxing match with Mike Tyson in July.
Deadline reported earlier this month a small number of layoffs were expected as the company reorganized its film department.
Rishi Rajagopalan is a social media associate producer and content writer for CBS News.
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