Netflix Co-CEO Ted Sarandos Photo: Kevin Winter (Getty Images)
Netflix’s belt-tightening / potential free-fall phase continues at a rapid pace this week as two separate news updates collide to outline where the head of the streaming service is these days: On the one hand, confirmation from the co-CEO Ted Sarandos that the company has been around for a long time – rumors backed by an ad subscription are finally coming … and on the other hand, a message that the company has just fired another 300 members of its staff.
The latest news comes just weeks after an earlier round of layoffs in which 150 people lost their jobs, many of them on social media or marketing departments. (This number also does not include dozens of freelancers and contractors whose jobs have been terminated, including in the company’s struggling original animation department.) Variety reports that today’s layoffs come from a number of the company’s divisions, mostly in the United States; Netflix employs about 11,000 people worldwide.
Meanwhile, at the Cannes Lions advertising festival, Sarandos was available to confirm what the streamer has been hinting at for centuries: it will soon launch a subscription level for the consumer market, which, according to Sarandos, is “People who say, ‘ Hey, Netflix is too expensive for me and I don’t mind advertising. ” Hence the presence of the streamer in the Cannes Lions itself, as the company apparently currently has no ties to advertisers. (Sarandos has promised that ads will not enter current paid subscription levels, although Netflix has been steadily raising prices for several years.)
Both events, of course, return to the same place: this catastrophic profit from earlier this year, when Netflix sent investors, who are confronted with reports that its subscribers have fallen for the first time in years. Both the layoffs and the advertising level seem to work from the same working theory: that Netflix has acquired almost the entire market of people (especially in the US and Canada) who would pay for its services in its current operating model. So they need to both expand their reach to cheap places (and get some ad revenue in the process) and significantly reduce their operating budget. (But rest assured: Sarandos has also confirmed that he remains committed to keeping Netflix your number one stop for older comedians making crappy jokes about Transphobia 101; the business market may be constantly changing, but some things will never change.)
[via THR]
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