Netflix kicked off 2024 with growth, reporting revenue and subscriber gains for the first quarter, including membership on its streaming plan with ads growing 65 per cent compared to the fourth quarter.
However, starting next year, Netflix will no longer report quarterly subscriber numbers and average revenue per user updates. In the first three months of 2024 Netflix added 9.3 million net paid subscribers – not as many as the whopping 13 million it added in Q4 but a significant increase from the 1.8 million it added in Q1 of 2023 and the 200,000 net losses it reported in Q1 2022. Its global subscriber base now stands at 269.6 million. Revenue in the quarter was up 14.8 per cent year over year to $9.37 billion, while Q1 operating income of $2.63 billion was up 54 per cent yoy.
Meanwhile, Netflix is now prioritizing financial results versus adding to its subscriber count. Noting that it now generates substantial profit and free cash flow, alongside variations in pricing and plans across regions and new revenue avenues like advertising and paid sharing, in its Q1 letter to shareholders, the SVOD giant said starting with Q1 2025 it will no longer be reporting quarterly subscriber figures or average revenue per member (aka ARM, which is Netflix’s metric for ARPU). It plans to continue providing regional revenue breakouts and to announce “major subscriber milestones as we cross them.”
Asked by investment analysts on Thursday’s earnings call to elaborate on the decision, Netflix Co-CEO Greg Peters suggested subscriber and ARM metrics are no longer the best indicators for the company’s business. He noted Netflix continues to develop its revenue model to include aspects such as advertising and paid sharing that aren’t directly connected to the number of subscribers. It’s introducing multiple plan tiers and pricing plans, which vary across countries and where price points “are going to become increasingly different,” where Peters noted each incremental subscriber brings different business impacts.
As for the first three months of 2024, Netflix grew subscribers across all its major regions. And while we still get them, here are subscriber results for Netflix in Q1: US/Canada added 2.53 million net subscribers in the quarter, for a domestic base of 82.65 million. Average revenue per member was up seven per cent year over year to $17.3.
Europe, Middle East and Africa (EMEA) added 2.9 million subscribers for a base of 91.7 million. ARM was flat at $10.92. Latin America (LATAM) added 1.7 million paid subscribers for a base of 47.7 million. ARM was down four per cent year over year to $8.29. Asia-Pacific (APAC) added 2.15 million subscribers for a base of 47.49 million. ARM was down eight per cent yoy to $7.35.
With member households across more than 190 countries and more than two people on average per household, Netflix’s shareholder letter said we “have an audience of over half a billion people”.
