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Netflix is trying to prove to the world that it's all grown up

Netflix is trying to persuade Wall Street that it is now all grown up. After squeezing out millions of additional subscribers via its password sharing crackdown and through the introduction of cheaper advertiser-supported plans, the streamer knows that its growth spurts are coming to an end — and now it wants investors to stop obsessing over those pesky membership numbers and instead focus on other metrics.

"In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential. But now we're generating very substantial profit and free cash flow. We are also developing new revenue streams like advertising and our extra member feature, so memberships are just one component of our growth", Netflix told shareholders as it reported quarterly earnings.

To that end, Netflix said that it will no longer report quarterly subscriber numbers, starting in 2025. Alas, the metric that Wall Street has forever judged Netflix on — the metric that prompted legacy media companies to burn endless piles of cash in their bids to compete with the streamer — will be retired. The decision to shut off transparency on the metric represents a significant turning point in the streaming revolution. For years, Netflix has prided itself on being extraordinarily transparent. Now it is aiming to hold its cards closer to its chest. And given that streaming giant is the trendsetter in the space, one could expect that other media companies will be inspired by the company's move and also opt to cease reporting such data.

To be fair, what Netflix is saying isn't necessarily off base either. As the company shifts its business model away from subscriptions and toward advertising and other revenue streams, it makes sense to consider how much time users are spending on the service. The more content a user consumes on Netflix, the more likely they are to continue paying for the service, and the more money Netflix then makes from that single subscriber. "We're focused on revenue and operating margin as our primary financial metrics — and engagement (i.e. time spent) as our best proxy for customer satisfaction,” Netflix underscored in its letter to shareholders.

Regardless, less transparency in an already opaque industry is not ideal. The walled garden of streaming already lacks the same detailed viewership data that Nielsen collects on linear television broadcasters. Now, visibility into the streaming world will get even dimmer.

The announcement from Netflix managed to overshadow its otherwise stellar quarter. The company handily beat expectations and added a staggering 9.3 million subscribers, meaning it now boasts nearly 270 million in total. Netflix also beat analyst expectations on both earnings and revenue. However, it wasn't all good news. Netflix forecasted its subscriber growth to be lower in quarter two, chalking it up to “typical seasonality.” That led the stock to slide nearly 5% in after-hours trading.

Whether "typical seasonality” is solely to blame, or whether the streamer is simply starting to hit a ceiling, is hard to tell. Perhaps it is a mix of both. Whatever the cause, the stock sliding on the less-than-ideal outlook is a prime example of why Netflix wants Wall Street to stop focusing on its subscriber numbers. And, in one year's time, investors won't have a choice.

Adapted from: https://edition.cnn.com/2024/04/19/media/netflix-subscription-numbers/index.html

Answer question according to TEXT 3 below.

TEXT 3

Available at: https://larrycuban.wordpress.com/2019/11/25/evenmore-cartoons-on-technology/. Access on: Apr. 9th, 2024.

Text 4

Hope is the thing with feathers

(Emily Dickinson 1830 –1886)

Hope is the thing with feathers

That perches in the soul,

And sings the tune without the words,

And never stops at all,

And sweetest in the gale is heard;

And sore must be the storm

That could abash the little bird

That kept so many warm.

I've heard it in the chillest land,

And on the strangest sea;

Yet, never, in extremity,

It asked a crumb of me.

* This poem is in the public domain. Available in:< https://poets.org/poem/hope-thing-feathers-254>

Text 1

The Courage to Be Imperfect

Perfectionism, self-examination and the kissing of frogs

Michael J. Formica

Posted July 9, 2009

Someone once said that there are two kinds of people in the world - those who are right... And nowhere are we more inclined to want to be right than with regard to ourselves. In fact, more often than not, we want to be perfect. What this striving for perfection often leads to is a kind of social paralysis.

If we are constantly focused on making the right decision, we will sometimes find ourselves in a place ranging from morbid indecision to outright fear. Getting it right, making the good choice and avoiding the faux pas endorse in us a rigidity of character and action that is limiting and, in derailing our momentum, deflects our potential evolution.

The willingness to be wrong or, as more properly suggested here, the courage to be imperfect, allows us the opportunity to discover many things about ourselves. Without exercising this courage, we put ourselves into a straightjacket of sorts, setting our thoughts and actions in a dismally fettered pattern.

This line of thinking was prompted by a conversation that I had with a client yesterday where in she had come to the conclusion that she was a bit of a perfectionist. What she had puzzled out for herself was that her perfectionism, rather than serving her, was actually hindering her ability to be flexible, open to new possibilities and clear about what she wanted for herself and her life.

At some point, I suggested that the fairy tale about the princess kissing frogs to find the prince was a good metaphor for stepping outside of one's comfort zone and "trying something on for size' without an overly self-conscious regard for the potential consequences of the choice. She mentioned that a few days earlier she had seen the trailer for a movie in which the princess kissed a frog and turned into a frog herself. Brilliant.

If we are unwilling to kiss a few frogs - to explore the possibilities that are presented to us in anticipation of finding something unexpected - then we, ourselves, may turn into frogs. That is, become stuck in our place and condemned to something that is not us. We can, without the willingness to be open to making mistakes, limit ourselves right into a state of personal inauthenticity.

Available

in:<https://www.psychologytoday.com/intl/blog/enlightened-living/200907/the-courage-be-imperfect>