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The reason why Netflix is keeping its subscriber count private

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Why Netflix will stop telling everyone its subscriber count

In a surprising move, Netflix has announced that starting next year, it will no longer reveal its subscriber count. Instead, the streaming giant will only be announcing major subscriber milestone achievements. The decision comes as Netflix believes that the subscriber count no longer accurately reflects the company’s growth.

According to Netflix, the subscriber count was a significant indicator of the company’s potential in its early days when revenue and profits were minimal. However, with substantial profit and free cash flow, as well as the development of new revenue streams like advertising and extra member features, memberships are now just one component of the company’s growth.

This shift in strategy could pose challenges for investors, especially as Netflix’s shares have been struggling for some time. Not providing the subscriber count for investors to monitor adds another layer of uncertainty.

Two years ago, Netflix publicly disclosed a loss of one million subscribers. This moment highlighted the importance for investors to focus on profits rather than solely on subscriber numbers. This quarter, the streaming service reported a significant profit of $2.3 billion on revenue of $9.4 billion, marking a turnaround from years of loss-making.

This approach of withholding detailed business information to focus on broader financial metrics has been adopted by companies like Google, leading to all-time high stock prices. The impact on Netflix’s stock performance remains to be seen as the company navigates this new reporting strategy.

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