Netflix feels the heat
Jul 20, 2022 (Accessed January 2023)
Written by Sara Fischer ... Sara Fischer is author of Axios Media Trends
Netflix on Tuesday predicted that its streak of losing subscribers will end soon — suggesting the broader streaming slowdown may not be as bad as investors were expecting, although headwinds still persist.
Why it matters: The proliferation of streaming services is threatening Netflix's dominance, but its performance is still seen as a bellwether for the larger entertainment industry
Driving the news: Netflix lost 1.3 million subscribers in the U.S. and Canada, a troubling sign of saturation in the world's most lucrative streaming market. But company executives said on an earnings call Tuesday they believe the slide will stop in the next quarter.
- Netflix has lost more than $200 billion in market value this year.
- 'We are talking about losing one million [subscribers] instead of losing two million, so our excitement is tempered by less bad results,' co-founder and co-CEO Reed Hastings said on an investor call.
Data: Netflix earnings reports; Chart: Erin Davis/Axios Visuals
What we're watching; While executives sounded optimistic about Netflix's overall strategy, it was clear that the days of extraordinary user growth are over now that the pandemic has receded.
- The company's chief financial officer said he doesn't expect to increase the amount the company spends on content — about $17 billion per year — for the next few years, despite previous annual budget increases
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What's next: In an effort to boost subscriptions, the company said it would finally introduce an ad-supported tier in early 2023, after dismissing the idea for years.
- Executives declined to say how many current subscribers it believes will switch plans.
- Netflix also discussed tests to introduce paid sharing plans to force the roughly 100 million+ households that it believes are watching Netflix through shared passwords finally pay up.
The big picture: Netflix has been able to maintain its lead as the most-watched streamer in the U.S., despite having to overhaul its content strategy to become less reliant on licensing titles from other networks.
- Overall, a majority (60%) of the content assets on Netflix's balance sheet are self-produced.
- The company cited new Nielsen figures that suggest it drew more TV viewing time than any other outlet during the 2021-22 TV season.
- Thanks to the extraordinary popularity of the fourth season of 'Stranger Things,' the company said it captured the highest percent of total U.S. screen time (7.7%), measured by Nielsen, in June.
The bottom line: Executives believe that as long as streaming continues to grow, Netflix's business will remain resilient.
“It’s definitely the end of linear TV over the next 5-10 years,” Hastings said.
Go deeper: Netflix stock spikes following better-than-expected subscriber losses
Reed Hastings stepping down as Netflix co-CEO to become executive chairman
Original article:
https://www.axios.com/2023/01/19/reed-hastings-netflix-ceo-executive-chairman
Written by Sara Fischer ... Sara Fischer is author of Axios Media Trends
Photo by Michael M. Santiago/Getty Images
Netflix co-founder Reed Hastings is stepping down as co-CEO of the streaming giant, and is moving into a new role as executive chairman, the company announced Thursday.
Why it matters: Hastings has led the company for 25 years, and has been the chief architect behind some of its most critical transition points — most notably, its transition from DVDs to streaming.
Details: As part of the leadership change, Netflix co-CEO Ted Sarandos will be joined by a new co-CEO — current Chief Operating Officer Greg Peters.
- Peters will also join Sarandos, Hastings and others as a member of Netflix's board. All three executives have worked together at Netflix for 15 years, the company noted in a memo to investors.
- Sarandos was named Hastings' co-CEO in 2020.
- Bela Bajaria, Netflix's former head of global TV, has become Chief Content Officer.
- The company's head of film Scott Stuber has been named chairman of Netflix Film, a nod to the company's growing movie ambitions.
What they're saying: “I want to thank Reed for his visionary leadership, mentorship and friendship over the last 20 years. We’ve all learned so much from his intellectual rigor, honesty and willingness to take big bets – and we look forward to working with him for many more years to come,' Sarandos said.
- 'Since Reed started to delegate management to us, Greg and I have built a strong operating model based on our shared values and like-minded approach to growth. I am so excited to start this new chapter with Greg as co-CEO.'
The big picture: The executive shakeup comes as Netflix moves to diversify its business from being fully reliant on ad-free subscriptions.
The company has introduced a new subscription advertising tier and has pushed to build up its gaming and merchandising businesses.
Go deeper: Netflix spreads its wings
Editor's note: The story has been corrected to show that Bela Bajaria, Netflix’s former head of global TV, has become the chief content officer, not replaced Peters, who did not occupy that position. Peters is the chief operating officer.
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