Netflix has once again proven its dominance in the streaming world by adding an impressive 9.3 million subscribers in the first quarter of the year. The company’s profit also soared, thanks in part to its expanding advertising business. However, Netflix surprised investors by announcing that it will no longer provide quarterly updates on subscriber numbers starting next year, making it harder to track the service’s future growth.
The strong performance demonstrates that Netflix is still building on the momentum it gained last year when it cracked down on password sharing and introduced a low-priced, ad-supported tier. These strategies helped Netflix add 30 million subscribers in 2022, the second-largest annual increase in the company’s history. By the end of March, Netflix boasted nearly 270 million worldwide subscribers, with about 83 million in its biggest market, the U.S. and Canada.
Investors are increasingly viewing Netflix as the clear winner in the fierce streaming battle against competitors like Apple, Amazon, Walt Disney Co., and Warner Bros. Discovery. This confidence has caused Netflix’s stock price to more than double since the end of 2022.
Despite the strong financial showing, Netflix’s decision to stop providing quarterly subscriber updates caught investors off guard, causing the company’s shares to dip more than 5% in extended trading. In a video meeting with analysts, Netflix co-CEO Greg Peters explained that management believes the company’s financial growth is a more meaningful indicator than quarter-to-quarter subscriber fluctuations.
Experts suggest that Netflix’s move to stop reporting quarterly subscriber numbers may be due to the company having reaped most of the gains from its password-sharing crackdown and recognizing the difficulty in maintaining that momentum. Additionally, Netflix’s renewed focus on boosting profit and revenue has led to more judicious spending on original programming and regular subscription price increases.
Netflix’s advertising sales, while still a small part of its overall finances, are expected to bring in around $1.5 billion this year and continue to grow steadily in the coming years. The low-priced, ad-supported tier is having a significant impact on attracting and retaining subscribers, with an analyst projecting 41 million customers paying for the commercial format.
The Associated Press contributed to this article.