Netflix, the streaming giant, is changing its narrative in the stock market. After a tumultuous year that saw its share price plummet from over $600 to below $200, Netflix is shifting its focus away from reporting subscriber numbers and average revenue per user (ARM). Co-CEOs Ted Sarandos and Greg Peters are looking to tell a new story about the company’s future.
The past year has seen a surge in subscriber numbers, thanks in part to a crackdown on password-sharing. However, as the pandemic-driven growth wanes, Netflix is preparing for a new phase. This includes evolving pricing strategies, potentially lowering costs in some markets, and introducing an ad-supported tier.
The decision to stop reporting subscriber numbers has raised eyebrows on Wall Street, with some analysts expressing concerns about future growth. However, Netflix is confident in its new direction, focusing on metrics like revenue, operating income, and engagement.
The move mirrors Apple’s decision to stop reporting unit sales of iPhones and Mac computers in 2018, emphasizing a broader portfolio and revenue diversity. Netflix’s nascent ad tier is expected to become a significant revenue driver in 2025.
As Netflix reshapes its narrative, the company is positioning itself for a new chapter in its stock market story. With a focus on revenue and engagement metrics, Netflix is looking to captivate investors with a compelling new storyline. Only time will tell if Wall Street is ready to binge on Netflix’s latest narrative.