Release Date: April 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Could you please talk about the decision to stop reporting quarterly membership in ARM data in 2025? Why eliminate this?
A: (Gregory K. Peters - Co-CEO, President & Director) We are evolving our revenue model to include advertising and extra member features, which are not directly connected to the number of members. We're focusing on key metrics like revenue, OI, net income, EPS, and free cash flow. We'll still update on membership milestones periodically, but it won't be part of our regular reporting to better reflect our business's evolution.
Q: What changes inside Netflix explain the significant improvement in member growth we're seeing today, excluding the paid sharing initiative?
A: (Theodore A. Sarandos - Co-CEO, President & Director) We're focusing on thrilling our members with consistent, high-quality content across various regions and genres. This approach has led to a dependable output of popular shows and films, enhancing our global engagement and member growth.
Q: Can you please explain what drives the revenue deceleration for the full year, and will Q2 subscriber growth be higher or lower than Q2 of 2023?
A: (Spencer Adam Neumann - CFO) The deceleration is due to tough comparisons from the previous year's growth, influenced by our initiatives like paid sharing and launching our ads business. For Q2 subscriber growth, we expect it to be lower than Q1 this year, following typical seasonality.
Q: Which inning are we in with respect to enforcing paid sharing?
A: (Gregory K. Peters - Co-CEO, President & Director) We've operationalized the paid sharing mechanism and are continually improving it. Our focus is on converting more viewers into paying members, enhancing our overall business growth.
Q: What are the most important drivers of scaling your ad tier?
A: (Gregory K. Peters - Co-CEO, President & Director) Key drivers include leveraging partner channels, device integrations, and marketing to increase awareness of our ads tier. We aim to offer a compelling price point and maintain a low ad load to enhance user experience and scale effectively.
Q: Could you provide an update on engagement trends now that paid sharing is mostly behind you?
A: (Theodore A. Sarandos - Co-CEO, President & Director) Engagement remains strong, with Netflix consistently having the #1 movie or series in many weeks of the year. We continue to capture significant TV hours and member satisfaction, indicating healthy engagement levels.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
