Why Netflix will stop telling everyone its subscriber count

Netflix from next year onwards will not be telling its subscriber count, rather it will only be announcing its major subscriber milestone achievement. Netflix has said that it has started doing this because it feels that the subscriber count doesn’t reflect the growth of the company.

Smartphone with Netflix logo is placed on a keyboard in this illustration.(Reuters)

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Netflix said, "In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential. But now we're generating very substantial profit and free cash flow (FCF). We are also developing new revenue streams like advertising and our extra member feature, so memberships are just one component of our growth. In addition, as we've evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact."

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This can be problematic for investors since the shares of Netflix have been low for some time now, and topping it all, it won’t be providing the subscriber count for investors to keep a tab on.

Two years ago, Netflix made the fact public that it had lost one million subscriber count. After this, the investors started emphasizing that it’s more important to focus on the profits and not the subscribers.

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This quarter, Netflix earned a whopping $2.3 billion on revenue of $9.4 billion, making it a huge profit after years of loss-making.

The strategy of not telling about the business has also been used by giants like Google, which has made their stocks reach an all-time high.

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