Netflix has announced that its first quarter revenue grew 15% to nearly $9.4 billion USD.
👉 Background: Netflix has grown to become the most popular streaming company in the world. It first started by licensing content from other production studios but has grown into creating its own original content too, like Griselda or The Gentleman.
👉 What happened: Netflix has announced that its first quarter revenue grew 15% to nearly $9.4 billion USD. It also achieved 9.3 million net new paid subscribers largely due to the crackdown in password sharing.
👉 What else: Netflix reckons more than 100 million people were using an account they didn’t pay for. But despite these strong numbers, Netflix said that it won't be sharing subscriber numbers anymore, claiming that revenue is the important number, not subscribers.
💡When it comes to investing, less disclosure and transparency is never a good thing for investors. Subscriber growth has become a key signal of Netflix's business health for investors.
💡Despite subscriber growth being very strong since the password crackdown, Netflix’s decision could be a sign that it expects subscriber growth to slow down soon.
💡By only sharing revenue, it could potentially hide the slowing subscriber growth by increasing the cost of subscription in the future.
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