Netflix Inc.’s co-CEO is blaming a recent slowdown at the streaming service on various factors, including the impact of inflation on household budgets, a decline in smart TV sales due to supply chain constraints, and the company’s exit from Russia.
“Every customer is asking the question of the value of a subscription about its cost,” Ted Sarandos said in an interview with the French newspaper Le JDD on Sunday. He added that Netflix’s vision of “satisfy the consumer” remains intact, citing the popularity of the new season of “Stranger Things.”
Netflix lost 200,000 subscribers in the first quarter and has been attempting to reduce costs. As part of those efforts, the streaming company laid off 150 employees in May and another 300 in June.
The company is “adapting to the slowdown in growth compared to projections” and is doing so “without limiting spending on content production, which will reach 17 billion euros ($17.3 billion) in 2022,” Sarandos said.
Ads will be introduced globally, complicating Netflix’s business model, but will allow the company to attract customers willing to pay less, according to the co-CEO. Netflix now has more than 10 million subscribers in France, according to Sarandos, up from 6.7 million in 2020, the last time the company reported the figure.
It’s investing 200 million euros in French content this year, including 40 million euros on films released first in French movie theaters. It recently bought the rights to stream Johnny Depp’s next movie in France, Bloomberg previously reported.
Nonetheless, Sarandos criticised an exclusivity agreement with local film guilds that allows Netflix to show films in France only 15 months after they are released in theatres. “The appropriate time frame is a few weeks, not a few months,” he said.