Netflix has had a bit of a bad run lately. The world’s leading subscription video-on-demand (SVOD) service reported a net loss of over 200,000 subscribers last quarter and is expected to lose another 2 million in the next one. It lost 44% of its stock value and users are threatening to leave the service if it goes ahead with its plan to charge them for password sharing.
Disney+ is gaining ground as the popularity of their bundle of Hulu, ESPN+, and Disney+ has broken 200 million global subscribers and now threatens Netflix’s 221 million worldwide users. Even kids are leaving Netflix for the greener pastures of Disney’s Marvel, Pixar, and animated libraries.
So how does Netflix plan to stop the bleeding? An article from The Hollywood Reporter suggests that they hope to do so by trimming the fat. The streaming service started by axing 2% of its workforce, which was about 150 employees, including creators for the company’s blogs, staffers from the marketing department, and a handful of executives. One of Netflix’s major goals moving forward is to embrace the idea that less is more both in terms of personnel and content.
With that in mind, users can expect to see a subtle, but impactful decrease in the number of Neflix Original movies and TV series as the streamer bucks years of tradition and transitions to a quality-over-quantity approach to programming. Although the goal is still to debut new content every week, Netflix would rather give users one, really good mid-budget movie instead of two less than desirable, smaller films. Don’t worry though, Netflix has no plans of getting rid of smaller movies in the process; they just want them to be better. And it looks like the streamer’s goal is to convert those smaller movies to a more passionate niche market where they have the opportunity to thrive and better satisfy a dedicated portion of users.
Also, by decreasing the number of originals, Netflix will be able to part ways with executives who no longer have as many responsibilities. The streamer’s new motto appears to be “bigger, better, fewer.”
The streamer’s new plan also applies to big-budget movies as well. The streaming service is fully aware that those big time films drive subscriptions, so they have no desire to skirt them away. Netflix has already grabbed the $200 million Ryan Gosling and Chris Evans project “Gray Man” and will stream it one week after it hits theaters on July 15. Last spring they cut a $469 million deal to bring two “Knives Out” murder mystery sequels to their platform as well. But the company is now cutting back on giving artists blank checks to spend as much as they possibly can on content that likely won’t provide a significant return on investment.
One source told THR, “This tendency to do anything to attract talent and giving them carte blanche is going away.” The article cites films like Martin Scorsese’s “The Irishman” which reportedly cost nearly $250 million but had little impact on subscriptions and failed to achieve the awards success that the streamer anticipated. While the service will still invest in A-list creators, it will do so with a more financially responsible mindset.
Netflix co-CEO Ted Sarandos is happy with the new direction, stating during the company’s April earnings call that the upcoming slate of films “is better and more impactful than it was in ‘21.”
With growing competition, Netflix is aiming to reverse course on years of standard operating procdure in order. to focus on making content that is driven by quality rather than volume in order to bring users to its platform while retaining them for as long as possible. Given the ever-changing streaming environment, that seems to be a sound strategy, but only time will tell if it pays off.
Netflix
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.