Netflix is ending its customary quarterly reporting of subscriber totals, a move that could blunt its growing sports ambitions.
The publicly traded streaming giant said Thursday that it will no longer disclose those subscriber numbers, starting with the first quarter of 2025, and will instead focus on other financial metrics such as revenue and operating margin. The shift immediately jolted Wall Street, prompting a 4.5% drop in Netflix shares in after-hours trading Thursday, and a 7% fall once full trading opened Friday.
Netflix already has the largest subscriber base in the industry, reaching 269.6 million globally in its last quarter, a figure 16% higher than a year ago. Company officials say a continued focus on subscriber totals is not in line with its growth into a more mature company that is developing additional revenue sources, such as advertising.
“Each incremental member has a different business impact,” said Greg Peters, Netflix co-CEO, in an earnings call with analysts. “And that means the historical math that we all did—number of members times monthly price—is increasingly less accurate in capturing the state of the business. So this change is really motivated by wanting to focus on what we see are the key metrics that we think matter most.”
Out of Step With Sports
Ted Sarandos, also Netflix co-CEO, reiterated on the call a more tempered strategy in sports relative to others, saying again, “we’re not anti-sports, but pro-profitable growth. And I think that’s the core of everything we do in all kinds of programming, including sports.” Within that strategy, however, has been a clear escalation in the company’s sports efforts, most recently shown by its acquisition of live rights to a Jake Paul-Mike Tyson fight, and for the WWE and its weekly flagship show, Raw.
But much of the sports industry, and the advertising that helps support it, relies on clear and publicly available audience metrics for media content. Nearly every other major streaming entity—including ones controlled by Disney, Comcast, and Warner Bros. Discovery—regularly reports its streaming subscriber figures. On television, Nielsen audience totals have been a benchmark for decades. Even Amazon, another entity that historically had been more opaque about its streaming metrics, has worked with Nielsen for the past two years to help give a clearer view of its audience for Thursday Night Football.
“Eliminating regular reporting of membership data raises questions around management’s confidence to further grow the base, though it is not implausible that the change is intended to reduce quarterly sentiment volatility around relatively small changes in true economic drivers,” wrote Michael Morris, an analysts with Guggenheim, in a research note.
