Netflix’s decision to stop disclosing member counts starting in 2025 fueled growth concerns, causing the company’s shares to dip on Friday. Analysts cautioned that competitors might decide to do the same by doing away with the crucial indicator of the streaming industry health.
Wall Street tracks subscriber growth for streaming giants like Netflix, Disney, and Warner Bros Discovery to gauge their performance.
Streaming giant Netflix announced on Thursday that it would stop disclosing new member numbers after three quarters of phenomenal growth.
Analyst Dan Coatsworth from AJ Bell notes that when major players in industries change performance metrics, competitors often follow suit.
Netflix’s Strategic Shifts
Netflix’s decision to crack down on password sharing, in response to analysts’ growth concerns, led to 9.3 million new signups initially.
Antenna’s February findings suggest streaming growth in the United States may be saturating, as it halved in 2023.
Due to lower-than-expected revenue for the second quarter, Netflix’s shares experienced its biggest decline since July, plunging 7.3% to $565.85. Its market valuation was predicted to drop by around $19 billion if losses continue.
Netflix plans to boost its advertising and improve content quality and variety to drive future growth.
Wolfe Research suggests Netflix might pursue NBA media rights, a shift from its focus on sports entertainment like WWE and Formula One.
At a critical juncture, with the NBA’s media rights transaction, Netflix moves from subscribers to engagement (and decreases disclosure). Will Netflix pay $1–3 billion to acquire some NBA media rights? We believe that. Netflix has the power to accelerate the internationalization of sports brands, which dominate the largest portion of pay TV.