The breakaway current leader of online streaming, Netflix, has just announced yet more dizzying figures for growth: during the first quarter of 2024, it added more than 9 million new subscribers.
This numbers blow out what Wall Street analysts were estimating – 4.9 million – and now Netflix’s global paid subscriber base of 269.8 million. In its first-quarter financial report, Netflix is not doing too badly, you could say: its revenue was $9.37 billion and profit $2.332 billion.
Odds are that this outstanding success is based on many factors, counting notably the fact that Netflix brought steps to curb password-sharing, boost the charge, and bring advertising. These initiatives have not only delivered a significant boost to Netflix’s bottom line, they have freed the company up to prioritise shareholder value over numbers of viewers.
But despite that exceptional result, Netflix also announced major changes to reporting, revising out the quarterly release of subscriber counts that Wall Street analysts now use to predict its prospects. Beginning next year, the company will no longer issue the big report.
Instead, it plans to announce “major subscriber milestones” as it achieves them. Netflix believes that this new approach will provide a more accurate reflection of its business performance, particularly considering its massive scale and global reach.
As people observe, even though the company is doing well overall, not everyone agrees with every decision it makes. For instance, some of its employees have protested against a contract it has with the Israeli government, called Project Nimbus.
Netflix insists that this contract doesn’t involve highly sensitive or military-related tasks.
Looking forward, Netflix has big plans. It’s thinking about getting rid of its basic subscription in some places where there’s an option for an ad-supported version.
Also, it’s diving into gaming, with almost 90 games in the works. Plus, it’s starting to use ads to deal with slower growth and more competition. These moves show that Netflix is committed to growing and innovating despite challenges.
As Netflix faces these challenges and keeps growing, it’s unclear how these decisions will affect its future. But one thing’s for sure: with its strong growth and ambitious plans, Netflix will stay a major player in streaming for years to come.
But it would rather proclaim ‘meaningful subscriber milestones’ when they occur. It is how big and how far-reaching our business operation is that justifies our new accounting approach’ By not reporting its subscriber numbers more regularly, Netflix is betting that its users are not actually that fickle.
Even as they recognise that the company is doing well overall, a lot of people don’t think every decision is praiseworthy. For instance, some of their employees actually oppose the Project Nimbus deal with the Israeli government.
Netflix maintains that this agreement does not encompass highly sensitive or military tasks.
This is just the beginning for Netflix. In places where a straightforward subscription is offered, it’s possible that it will eventually vanish entirely in favour of ad-supported tiers.
Moreover, it is breaking into gaming and, so far, has nearly 90 games in the pipeline. Not least, it is beginning to insert ads in response to slowing growth and increased competition, to signal that continued scaling and innovation is still very much on the table.
Therefore, I don’t know what will come of these moves for Netflix as it grapples with such challenges and grows. But the obvious message for now is this: with its rapid development and management’s big bets, the streaming giant will remain one of the key players in the industry for the next decade (at least).
