Netflix experienced significant customer growth in the first quarter of 2024, adding 9.33 million new subscribers, more than double the average estimate of analysts. The company's success in attracting new customers was notable globally, with a particularly strong showing in the US and Canada, leading to higher-than-expected sales and earnings performance. In response to its strong growth, Netflix announced changes in its reporting strategy, stating that it will no longer disclose quarterly subscriptions and revenue per subscriber, opting instead to focus on traditional performance metrics like sales and profit.
Despite the positive news of growth and exceeding estimates, the announcement about stopping the reporting of certain metrics raised concerns among industry analysts. Netflix's decision to shift focus away from metrics like quarterly subscriptions and revenue per subscriber signifies a move towards evaluating its performance based on more conventional measures. While the company experienced a 16% increase in revenue during the first quarter of 2024, it was noted that the stock value of Netflix saw a decline of 4.6% following these updates.
Netflix also highlighted its content offerings, with new hits being released regularly, including series like Fool Me Once, The Gentleman, and Love Is Blind, contributing to its status as a leading TV network in various global markets. The company's crackdown on unauthorized account sharing has been credited as a significant factor in its recent growth, with over 100 million users estimated to have been using shared accounts without paying. Netflix's efforts to combat this issue have resulted in convincing many of these users to become paying subscribers, contributing to its current audience reach of over half a billion people.
Looking ahead, Netflix aims to sustain its growth by introducing new strategies, such as offering a cheaper, advertising-supported version of its service and investing in live programming like stand-up specials and upcoming sporting events. The company also reports that about 40% of its new customers opt for the advertising-supported tier where available, positioning Netflix to diversify its revenue streams and attract cost-conscious consumers.