How Netflix Dropped the Mic With Its New Subscriber Strategy

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.

Though the company now has that safeguard, a strong 2025 slate could also “help balance out potential flattening,” according to Katz.

This year, Netflix is releasing the final seasons of You, Cobra Kai, Stranger Things, The Witcher, and Squid Game, as well as new seasons of Wednesday and Ginny & Georgia. Original films also include Knives Out 3 and Happy Gilmore 2.

He added that the continued emphasis on licensed and original local language programming has helped Netflix to maintain its advantage in international resonance and penetration.

“One big question facing the streamer is if the second and third seasons of Squid Game can serve as an effective launching pad for greater non-English sampling from high-yield UCAN subscribers,” Katz said. “This will enable the company to stretch its content budget further and more efficiently as international programming is generally less expensive than U.S. productions.”

Leaning into ads and live

Moving forward, Netflix is also focusing more on live events as a revenue driver, which may or may not show up in subscribers.

For now, the company is looking at doing one-off events such as its Jake Paul and Mike Tyson fight, as well as its Christmas Day NFL games. However, like Netflix’s reversal on reporting quarterly subscribers, that strategy could change in the future.

“When Netflix stated in its shareholder letter that ‘we’re not focusing on acquiring rights to large regular season sports packages,’ it wouldn’t be surprising for Netflix to reverse course in the near future and acquire more sports rights,” Ross Benes, a senior analyst with eMarketer, said. “Expect the company to continue adapting by embracing strategies that it said it wouldn’t.”