Why investors are souring on Netflix
A cut to its advertising forecast and a fourth straight quarter of slowing growth have rattled investors.
Netflix has informed investors that they should not be concerned about the company's declining viewing times, despite acknowledging the issue in its third-quarter earnings report. The streaming giant prioritizes improving monetization as one of its main goals, along with enhancing entertainment value and leveraging new technology.
Netflix plans to push further into original titles, live events, and third-party programming as it faces intense competition and an explosion of content. However, the company did not disclose specific strategies to improve monetization. In its letter to investors, Netflix emphasized upcoming content such as NFL games, a Grand Theft Auto VI preview, and a partnership with French TV station TF1.
Despite the decline in US viewing time, Netflix still holds 7.8 percent of the US viewing time in July, a one-point drop from the same period last year. During an earnings call, co-CEO Ted Sarandos highlighted Netflix's success in Latin America, EMEA, and APAC, but acknowledged that US growth is slower than desired. Netflix recently laid off around 1,000 employees and replaced key executives, including chief content officer Bela Bajaria and film head Dan Lin, with Peter Rice set to take over as chief content officer on October 26th.
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