A day after Netflix co-CEOs Ted Sarandos and Greg Peters faced worried investors during the company’s third-quarter earnings call after reporting mixed financial results, the duo faced anxious staffers at a town hall meeting on Wednesday after laying off 1,000 people and reshuffling the executive ranks by replacing content chief Bela Bajaria with Peter Rice and also ousting film chief Dan Lin.
The double whammy of Wednesday’s layoffs, followed by Bajaria’s departure on Thursday, which Netflix employees learned about through the press before the news could be communicated internally, was reportedly brought up at the town hall meeting, with Peters indicating the job cuts were over for the foreseeable future.
As in the previous day’s earnings call, Sarandos touted new CCO Rice, who we understand was not present at today’s town hall as he officially starts next week.
In his absence, Sarandos spoke enthusiastically about Rice’s background, echoing his comments on the winning call.
“He is one of the few people in the industry who runs television networks, movie studios and streaming services. His creative instincts and business acumen are remarkable. He is truly a quality and volume operator at scale, and he does it in every form imaginable in entertainment, network, prestige cable, streaming, theatrical and television films and live sports,” Sarandos said Tuesday, emphasizing twice that Rice’s experience spans beyond film and television – areas for which he is best known through his position as president of Fox Searchlight Pictures during the Millionaire Slumdog And Little Miss SunCEO of Fox Networks Group and Chairman of Walt Disney Television.
This general perception led to some comments following Rice’s appointment last week that he would come from traditional media to the largest streamer with no streaming experience.
Although not extensive, Rice has some streaming experience. Her experience is broader than that of Bajaria when she joined Netflix, Zack Van Amburg and Jamie Erlicht when they took over Apple TV, and Jennifer Salke when she took the reins of Amazon MGM Studios.
Rice spent time on Hulu’s board of directors. And, for nearly three years, starting in 2019, when his then-top lieutenant (and eventual successor) Dana Walden took over as CEO of Hulu Originals until his ouster in 2022, he also approved greenlight decisions for a slew of buzzy Hulu series such as Only Murders in the Building, Dopesick, The Dropout And The Great. In this role, he also worked with FX specialist John Landgraf on the cable brand’s transition to streaming with viral series like The bear and backed big-budget risky bets that became FX streaming hits Shogun and Disney+ Percy Jacksonwhile also using its Searchlight connections to get the Summer of the soul documentary on Hulu before its awards run, capped by an Oscar win.
Even though Rice had no streaming experience, her hiring was still praised by producers and talent reps because of her creative credentials and Hollywood connections. This last point became a major talking point for Sarandos when explaining the reason for the change in direction.
“Most importantly, Peter Rice understands talent relationships,” he said Tuesday on the earnings conference call and reiterated it at town hall. Similar to the reaction of those watching the results webcast, those at the town hall saw the comments as praise for Rice, but also as an insult to Bajaria and her connections to talent, even though she was thanked for her 10 years at Netflix both on the call and at the town hall, I’ve heard.
Town hall attendees were also left with the impression that concerns about the chances of Netflix’s current pipeline making a massive impact may have contributed to the regime change, with Sarandos suggesting on the call that he expects Rice to put his mark and “have an impact on current projects, even in the short term.”
“I know we could do better, especially in the United States,” Sarandos said Tuesday.
At both forums, he talked about Netflix’s “commercial flywheel” that was fundamentally working but needed better execution, including refocusing on creating shows that could work globally.
The reset comes amid a major decline in stocks and a flashing red light on Wall Street as engagement growth has slowed amid “really solid doubles and triples” but no home runs this year, as Sarandos acknowledged Tuesday.
And the reset can include going back to basics.
At the town hall meeting, Sarandos reportedly talked about returning to prioritizing “member joy,” which was a key part of Netflix’s business philosophy and so important to co-founder Reed Hastings that he cited it as one of his biggest contributions to the company when he left earlier this year.
Echoing that at the town hall, Sarandos emphasized the importance of members and their experience as something that should inform everything they do at Netflix, I’ve heard.
Gn entert
