Netflix is adjusting its senior management team in order to address the challenges regarding user engagement.
On Thursday, this streaming giant announced that former Disney executive Peter Rice will take on the role of Chief Content Officer, responsible for global content organization, including scripted and unscripted series, films, as well as live events.
Rice will replace Bela Bajaria, who has held the position at Netflix for 10 years. Bajaria is currently in charge of the company's global content team, with a focus on live sports strategy. She joined Netflix in 2016 and helped the company launch unscripted businesses, as well as authorized and co-produced projects with studios. Later on, she moved to a senior creative role, overseeing a content budget of $20 billion at Netflix.
The popular TV dramas she is in charge of include "Stranger Things," "Wednesday," "Bridgerton," "Squid Game," "Adolescence," and "Chaos Teenage Years," as well as the Netflix film "Frankenstein" and the KPop "Witches' Squad." Bajaria has also helped to push Netflix into the live sports and event industry, including collaborations with WWE and NFL, as well as programs such as "The Roast Tom Brady".
Before joining Disney, Rice served as President of 21st Century Fox, CEO of Fox Networks Group, and the chief representative of Fox on the board of directors of Hulu. He also held the position of President of Fox Searchlight Pictures and helped to release films such as "Slumdog Millionaire," "Juno," "The Help," and "Life of Pi."
This executive change occurs during a turbulent period for Netflix. The company is facing stagnation in audience growth and is exploring new paths for growth. Just a few days ago, this streaming giant laid off about 1,000 people, which accounts for 6% of its total workforce.
The last time Netflix carried out such a large-scale layoff was in 2022, when the company reported its first quarterly loss of subscription users in over a decade.
BMO Capital Markets, the head of internet and interactive entertainment stock research, wrote in a research report released on Friday: "We believe that this round of layoffs reflects more structural changes in the cost base, rather than a response to short-term subscription user trends." Brian Pitz
Participation levels under pressure
Netflix stated in July that the viewership only increased by 2% in the first half of this year, as the company lacked popular programs that could trigger widespread discussion.
Co-CEO Ted Sarandos admitted at the Bloomberg Screentime conference last month that the company's "growth rate is not as fast as I would like it to be."
These warnings, coupled with the departure of Bajaria, have kept Wall Street on alert for any subsequent fluctuations.
Pitz wrote: 'The sudden departure of Bajaria likely indicates that we still expect user engagement to remain weak during the [third quarter].'
Netflix is scheduled to announce its third-quarter financial results on Tuesday.
In July, a Nielsen report stated that Netflix accounted for 7.8% of television viewing time, while YouTube nearly doubled that figure, reaching 14.2%.
YouTube has always been the biggest threat to Netflix in competing for users' time. For this reason, Netflix has been diversifying its content types in recent years, expanding into live sports, documentaries, and video games in order to compete for a share of consumers' attention.
Wells Fargo Stock Analyst Steven Cahall wrote in a research report last month: "If the opportunity is to reshape [Netflix] into a more comprehensive content hub, then the risk is missing out on original content that can spark nationwide discussion. We believe that the return of hit products is a necessary condition for this stock to strengthen again."
What can Rice bring to Netflix?
Rice has extensive experience in the fields of television and film, and recently served as the chairman of Walt Disney Television Company as well as the chairman of the company's comprehensive entertainment business. He manages a wide range of channels that cover broadcasting and streaming media, including ABC, Disney Channel, Hulu, and FX Networks. During his tenure, he oversaw the production of more than 300 programs, including "American Idol," "Modern Family," "School Ties," "The Bear Family Diner," "Murder in the Building," and "Shogun."
He has also been responsible for producing major sporting events such as the Super Bowl, the NBA finals, and the World Cup.
Under the leadership of Rice, Disney received approximately 300 Emmy Award nominations during the 2021 to 2022 period, with nearly 60 of them ultimately winning awards, covering its television networks and streaming platforms.
Meanwhile, the number of Emmy Awards won by Netflix is starting to slow down.
In 2021, Netflix tied the record for the most awards won by a single entity in one year with 44 trophies. However, this year it only received 16 awards, which is the lowest number in 10 years.
For Netflix, Rice also brought in experience from the film theater industry. In mid-2022, after Bob Chapek, then CEO of Disney, removed him from his position, he became an independent producer. Since 2023, he has produced films such as Saturday Night and "28 Years Later." Currently, he is working on a project to adapt the video game Elden Ring into a film.
At the end of last year, Netflix reached an agreement to acquire the film production studio and streaming media assets of Warner Bros. Exploration. However, a few months later, Paramount Skydance made a higher bid, and the latter completed the acquisition of WBD in early October.
Some individuals on Wall Street speculate that this streaming company may also seek further mergers and acquisitions, including acquiring the assets of NBCUniversal after its separation from its parent company Comcast.
Wedbush, Senior Vice President of Stock Research, wrote in a research report on Thursday: "Rice has held a long-term position at Fox and continued to work there after Disney acquired Fox, which gives him unique insights into the integration of these two major studios; if Netflix chooses to acquire another studio, this experience will be very relevant. Even without that, as Netflix further expands into the theater business and creates a more diversified content platform within the entertainment ecosystem, Rice's experience is also highly suitable."
