Netflix had a huge quarter.
In its fourth-quarter earnings report, the streaming giant announced its largest number of subscribers to date, adding nearly 19 million paid subscriptions, bringing its count to over 300 million accounts paying. Additionally, the company said 55% of signups were for its advertising tier, and the plan is so successful that the streamer increases pricesadding to its growing bottom line.
The news, which sent those of Netflix with the title fetching nearly $1,000, is the ultimate mic drop in the streaming industry.
In the future, the company reports updates on its own terms.
Early last year, the streamer announced that it would stop reporting quarterly subscriber counts and average revenue per user in the first quarter of 2025, and the company reiterated that in a letter to investors on Tuesday, saying that it would only “continue to announce paid subscriptions as we cross the keys”. milestones.
This announcement came as a surprise for the television industry in 2024, with the race for subscribers at the start of the streaming wars. Now, experts say this strategy is about to pay off for the company.
The 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 because the company goes beyond to be known solely as a subscription service.
“It’s hard to have a single metric and let a certain number of net new subscribers dictate your business when a larger percentage of your revenue over time comes from advertising,” Rayburn told ADWEEK. “The number of subscriptions alone does not dictate ad revenue. It’s about how many people are watching, what your CPMs are, and how well you’re doing targeted outreach.
According to Rayburn, the subscriber number doesn’t tell the full picture of the business, and even a smaller number of subscribers can generate more revenue if they watch more ads.
A lack of transparency regarding subscribers could also protect the company from market fluctuations.
As Brandon Katz, senior entertainment industry strategist at Parrot Analytics, explains, by announcing that it does not publish average revenue per user or per number of subscribers, Netflix is ​​getting ahead of the expected slowdown in its growth as the crackdown on password sharing reaches saturation point.
While the company now has that guarantee, a strong 2025 slate could also “help balance out a possible flattening,” according to Katz.
This year, Netflix is ​​releasing the latest seasons of You, Cobra Kai, Stranger Things, The Witcher and Squid gameas 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 focus on licensed and original local language programming has helped Netflix maintain its advantage in terms of international resonance and penetration.
“A big question facing the streamer is whether the second and third seasons of Squid Game can serve as an effective launch pad for greater non-English sampling among high-yield UCAN subscribers,” Katz said. “This will allow the company to increase its content budget further and more efficiently, as international programs are generally less expensive than U.S. productions.”
Rely on advertisements and live
Going forward, Netflix is ​​also focusing more on live events as a revenue generator, which may or may not appear among subscribers.
For now, the company plans to organize one-off events like its Jake Paul and Mike Tyson fightas well as his Christmas Day NFL Games. However, like Netflix’s turnaround on quarterly subscriber reporting, this strategy could change in the future.
“When Netflix stated in its letter to shareholders that ‘we are not focused on acquiring rights to large regular season sports packages,’ it would not be surprising if Netflix reversed course in the near future and acquired more sports rights,” Ross Benes, said a senior analyst at eMarketer. “We can expect the company to continue to adapt by adopting strategies that it said it would not do.”
