By Roshan Abraham and Harshita Mary Varghese
(Reuters) -Netflix shares fell on Friday after its plan to stop sharing subscriber numbers from 2025 fueled growth concerns, with analysts warning rivals could follow the move by scrapping the key measure of the streaming industry’s health.
Investors and Wall Street analysts have long looked at adding subscribers to evaluate how companies including Netflix (NASDAQ:), Walt Disney (NYSE:) Co and Warner Bros Discovery (NASDAQ:) are doing well in the streaming wars.
But after three-quarters of blockbuster subscriber growth, streaming pioneer Netflix said late Thursday it would stop reporting its numbers to focus more on revenue and profitability.
“Industries tend to work together and if one of the leading players decides it is better for investors to judge performance based on different metrics, rivals may follow the same logic,” said Dan Coatsworth, investment analyst at AJ Bell.
The move comes as some analysts raised concerns about how Netflix plans to maintain growth following a crackdown on password sharing that helped the company add 9.3 million new customers in the first quarter.
There are signs that streaming growth in the US is saturating, as it halved by 2023, data from research firm Antenna showed in February.
“While this is partly a sign of Netflix’s unparalleled market share, it also raises questions about the ultimate ceiling for streamers in the current landscape,” said Brandon Katz, entertainment industry strategist at Parrot Analytics.
Shares of Netflix fell 7.3% to $565.85, the biggest drop since July, as its second-quarter revenue forecast came in below expectations. If losses continue, its market value would fall by about $19 billion.
Netflix has said it plans to drive future growth by working to improve the variety and quality of its entertainment and scaling its advertising business.
Wolfe Research said the streaming giant could join the bids for NBA media rights, marking a major change from its strategy of focusing on sports entertainment – content such as the Formula 1 docu-series ‘Drive to Survive’ and WWE.
“Netflix is making the leap from subs to engagement (and less disclosure) at a pivotal moment: the NBA’s media rights sale. Will Netflix spend $1-3 billion on some of the NBA’s media rights? We think so. Sports is the largest share of the pay-TV pie, and Netflix can accelerate the globalization of sports brands.”
