That shift was in full view on Tuesday when Netflix NFLX reported third-quarter revenue growth of 16.3% to $7.5 billion, compared with growth of 28% and 31% in the third quarters of 2020 and 2019, respectively. The big picture is, no one s really sure, Netflix co-CEO Reed Hastings said in the company analyst Q&A after company executives were asked about its subscriber growth rate. You can't come off the craziness of COVID and be confident of the next two years. So we re going to push really hard. I think we re all wrestling with post-covid, how do things come back together? As it is dealing with a slowing growth rate, the company is offering investors another way to look at its viewership. In its quarterly investor letter, Netflix executives said they planned to disclose the hours viewed for its titles, instead of the number of accounts that watched an least two minutes of them.
Although the analyst conducting the Q&A on Netflix s earnings call did not ask any questions on the topic, Netflix said in its investor letter that it believes that engagement as measured by hours viewed is a slightly better indicator of the overall success of our titles and member satisfaction. This move may also seek to counter information being leaked to investors and the press. Last week, Netflix fired an employee for sharing confidential information with Bloomberg News that included internal metrics on The Closer, the controversial stand-up comedy special from Dave Chappelle. Some Netflix employees have voiced their concerns that the show is transgender and harmful to transgender people, and are planning a walkout on Wednesday.
The company seems to be trying to tell investors to look for other ways to measure its performance, as it continues to make huge strides as a streaming content provider and creator.
But for right now, Netflix will have to reassure shareholders that slowing growth does not mean that its valuation needs to come down too.