On Tuesday, Netflix Inc. (NASDAQ:NFLX) co-CEO Ted Sarandos acknowledged room to improve the streaming giant’s content strategy as the company reshuffles leadership, cuts jobs and faces mounting pressure to reignite growth.
Netflix CEO Wants Better Shows and Movies
During the company’s third-quarter earnings call, Sarandos said Netflix plans to concentrate on producing high-quality television shows and movies that make the service indispensable to subscribers.
“I know that we could do better,” Sarandos said, adding that the company sees an opportunity to take its programming lineup “to the next level.”
The comments come as Netflix navigates intensifying competition from YouTube, a subsidiary of Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, and TikTok, which are vying for viewers’ attention.
The company has expanded into video games, podcasts and live events, but some analysts have questioned whether these initiatives are distracting it from its core entertainment business.
PP Foresight analyst Paolo Pescatore described Netflix as a profitable operation but argued that it had taken on too many unwanted distractions. He said the company needed to refocus on delivering compelling content, Reuters reported.
Netflix Resets Content Leadership Amid Growth Concerns
Last week, Netflix laid off about 1,000 employees, or roughly 6% of its workforce and announced major leadership changes.
Former Walt Disney Co. (NYSE:DIS) and Fox executive Peter Rice will replace Bela Bajaria as chief content officer. Film division head Dan Lin is also departing, with Rice temporarily overseeing the film business until a successor is appointed.
The company also plans to expand its library by licensing more third-party content.
Netflix Cuts Advertising Forecast as Revenue Growth Slows
Netflix reported third-quarter revenue of $12.874 billion, up 12% year over year, while earnings per share reached 87 cents, beating analysts’ average estimate of 82 cents.
However, the company forecast fourth-quarter earnings per share of 67 cents, below analysts’ 73-cent estimate.
Price Action: Netflix shares closed at $68.69 on Tuesday and fell 5.69% to $64.78 in Wednesday’s premarket trading, according to Benzinga Pro.
According to Benzinga Edge Stock Rankings, Netflix has a negative price trend across the short, medium and long term, while its Quality score ranks in the 88th percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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