Spectacular profit boost for Netflix after code-sharing crackdown – Netflix

The company announced that it added 9.3 million subscribers in the first quarter of this year, bringing its total to 270 million. At the same time, the company’s profits during the same period increased by more than 2.3 billion dollars.

However, the company has announced that, starting next year, it will stop publishing information about the number of subscribers.

Announcing this decision, in a letter to shareholders, Netflix’s management typically states: “Early on, when we had little revenue or profit, subscriber growth was a strong indicator of our future prospects. [Πλέον] it’s just one parameter of our growth,” asking investors to focus on the company’s earnings and revenue.

The company’s revenue during the first quarter of 2024 recorded an increase of almost 15%, compared to the corresponding period last year, reaching 9.37 billion dollars.

The company also recognized the contribution to these results of a large number of successful producers.

Some investors interpreted the company’s surprise decision to stop releasing subscriber numbers as a sign that Netflix’s spectacular surge in its subscriber base may be coming to an end.

Analysts believe that the spectacularly improved figures are clearly influenced by efforts to crack down on the phenomenon of the use of the same code by many stakeholders, but it is not certain how long this can continue. Some, in fact, talk about “questions” that arise regarding the path that the company’s subscription base will follow in the near future.

Netflix is ​​not the first company to make such a decision, as both Meta and X have stopped publishing these figures, as they had ceased to be favorable for the image of the companies, since they were recording a slowdown.

Meanwhile, Netflix shares are up more than 30% since the start of the year, approaching a 2021 all-time high. But after the announcement, they were down nearly 5%.

Netflix still has the advantage of producing new shows, which has been proven to help retain subscribers, over showing older series and movies.

It is recalled that in 2002 the company had proceeded to increase the cost of the basic subscription package, a move that was followed by an unusually large decline in subscribers that worried investors and increased fears that Netflix was losing its dominant position in a market whose was a pioneer.

A short time later, the company announced its plans to crack down on the use of shared passwords, while introducing a new subscription package, which was cheaper but included ads.

At the same time, Netflix is ​​trying its hand at new areas such as sports and video games, while still securing the license to show productions from rival companies, looking for ways to boost its profits.

Analysts say the company has also benefited from its global presence, which has helped it maintain a relatively good flow of new productions despite strikes that have severely disrupted Hollywood for much of 2023.