Netflix has reported a strong first quarter of 2024, with double-digit growth for revenue and profit margin.
Revenue rose 15% to $9.4 billion, a rate that is expected to continue for the rest of the year, delivering an increased profit margin of 25%, up 1% from forecasts.
These are fine numbers for investors, but the Netflix stock was still down 2% in after-hours trading, possibly due to the company’s decision to stop reporting subscriber numbers starting in 2025. Netflix has been criticised for its refusal to reporting streaming figures on individual pieces of content and now it looks like that practice is being extended to cover its subscriber numbers.
In the first quarter of this year, the number of subscribers increased by 9.3 million to 269.6 million – helped by a cheaper ad-supported subscription tier.
In the countries where Netflix has subscriptions with advertising discounts, 40% of those new viewers take the cheaper subscription. This group grew in size by 65%, where in the two quarters before it was 70%.
Just under 17 million subscribers have the cheaper advertising subscription, or 6.3% of the total.
However, while keeping streaming figures underwraps helps guide the kind of content Netflix will invest in, advertisers will want granular reports so they can gauge their return on investment. Netflix is working thereana with Kantar and Lucid (brand awareness and recall) and Nielsen Catalina Solutions (sales figures) on a client-friendly reporting model to address this issue.
Apart from a better advertising product, Netflix wants to expand its portfolio with more and better games and more live television – specifically in comedy, sports, music and game shows. This has been on its wish list for some time. This the streaming giant will start carying content from WWE as well as an exhibition boxing match between influencer Jake Paul and Mike Tyson.
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