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Netflix had a massive quarter.
In its earnings report for Q4, the streaming giant announced its biggest subscriber numbers to date, adding nearly 19 million paid subs, which pushed its numbers to over 300 million paid accounts. In addition, the company said 55% of sign-ups are coming to its ad tier, and the plan is so successful that the streamer is raising prices, adding to its growing bottom line.
The news, which sent Netflix’s stock soaring to nearly $1,000, is the ultimate mic drop on the streaming industry.
Moving forward, the company is reporting updates on its own terms.
Early last year, the streamer announced it would stop reporting quarterly subscriber numbers and average revenue per user in Q1 2025, and the company reiterated that in a letter to investors on Tuesday, saying it would only “continue to announce paid memberships as we cross key milestones.”
The announcement came as a surprise to the TV industry in 2024, with the subscriber race being the early focus of the streaming wars. Now, experts are explaining that the strategy is about to pay off for the company.
Streaming wars enter a new era
Dan Rayburn, a streaming media expert, told ADWEEK that while some may accuse the platform of a lack of transparency, Netflix’s strategy of withholding quarterly subscriber numbers is smart as the company moves beyond being known only as a subscription service.
“It’s hard to have a single metric and let a number of net new subscribers dictate your business when a larger percentage of your revenue over time is coming from advertising,” Rayburn told ADWEEK. “The number of subs alone doesn’t dictate revenue for ads. It’s how much they watch, what your CPMs are, and how well you do targeted delivery.”
According to Rayburn, the subscriber number doesn’t give a full picture of the business, and even a smaller number of subscribers can lead to more revenue if they’re watching more ads.
A lack of transparency around subscribers could also shield the company from fluctuations in the market.
As Brandon Katz, senior entertainment industry strategist at Parrot Analytics, explained, by announcing that it’s not reporting average revenue per user or subscriber numbers, Netflix is getting ahead of an expected slowdown in growth amid its password-sharing crackdown reaching saturation.