Netflix hires Peter Rice to stream content. Here’s what it means

Netflix is shaking up its C-suite in an effort to solve its engagement issues.

On Thursday, the streaming giant announced that former Disney executive Peter Rice would take over as chief content officer of the company, overseeing the global content organization, including scripted and unscripted series, films and live events.

Rice replaces 10-year Netflix veteran Bela Bajaria, who most recently led the company’s global content team focusing on its live sports strategy. Bajaria was initially hired in 2016 to help the streamer launch an unscripted division as well as studio licensing and co-productions. She then moved on to the biggest creative role, heading Netflix’s $20 billion content budget.

She has overseen popular TV series like “Stranger Things,” “Wednesday,” “Bridgerton,” “Squid Game,” “Adolescence” and “Beef,” as well as Netflix films like “Frankenstein” and “KPop Demon Hunters.” Bajaria also helped push Netflix into live sports and events, including deals with WWE and the NFL as well as programs like “The Roast of Tom Brady.”

Prior to his time at Disney, Rice was chairman of 21st Century Fox and CEO of Fox Networks Group, as well as the top Fox executive on the board of Hulu. He also served as president of Fox Searchlight Pictures and helped release “Slumdog Millionaire,” “Juno,” “Little Miss Sunshine” and “Sideways.”

The change in leadership follows a tumultuous period for Netflix, facing audience stagnation and exploring avenues for growth. This comes just days after the streaming giant laid off around 1,000 employees, or 6% of its workforce.

The last time Netflix made cuts of this magnitude was in 2022, when it reported its first quarterly loss of subscribers in more than 10 years.

“We believe this round of layoffs reflects structural changes in the cost base more than a reaction to near-term subscriber dynamics,” Brian Pitz, managing director and head of Internet and interactive entertainment equity research at BMO Capital Markets, wrote in a research note released Friday.

In July, Netflix reported that viewership grew just 2% in the first half as the streamer suffered from a lack of shows with water-cooler-level hype.

Co-CEO Ted Sarandos admitted last month at the Bloomberg Screentime conference that the company is “not growing as fast as I would like.”

These warnings, and now Bajaria’s exit, are preparing Wall Street for further turmoil to come.

“Bajaria’s sudden departure likely signals to us that user engagement may have remained low throughout (the third quarter),” Pitz wrote.

Netflix is ​​expected to report its third-quarter financial results on Tuesday.

In July, Nielsen reported that Netflix generated 7.8% of TV viewership, while YouTube accounted for nearly double that figure, at 14.2%.

YouTube is the biggest threat to Netflix in the battle for viewers’ time. In response, the streaming giant has sought to diversify its content in recent years, expanding into live sports, documentaries and video games in order to compete for a share of consumers’ attention.

“If the opportunity is to recast (Netflix) into a broader content hub, the risk is missing out on the water cooler originals,” Steven Cahall, an equity analyst at Wells Fargo, wrote in a research note last month. “We view breakouts as essential for the stock to perform again.”

Rice has a wealth of experience in television and film, most recently serving as chairman of Walt Disney Television and president of general entertainment for the company. He has managed a wide range of broadcast and streaming channels, including ABC, Disney Channel, Hulu and FX Networks. During his tenure, he oversaw the production of more than 300 shows, including “American Idol,” “Modern Family,” “Abbott Elementary,” “The Bear,” “Only Murders in the Building” and “Shogun.”

He has also led major sporting events such as coverage of the Super Bowl, NBA Finals and FIFA World Cup.

Under Rice’s leadership, Disney earned approximately 300 Primetime Emmy nominations between 2021 and 2022. Of those nominations, it won nearly 60 awards across its television networks and streaming platforms.

Meanwhile, Netflix’s Emmy wins have slowed.

In 2021, it tied the record for most trophies won by an outlet in a single year with 44. This year, however, it only won 16 awards, its lowest Emmy award in a decade.

With Rice, Netflix is ​​also recruiting an executive with theater experience. After being ousted by then-Disney CEO Bob Chapek in mid-2022, he moved to an independent producer role. Since 2023, he has produced films like “Saturday Night” and “28 Years Later.” He is currently developing a film adaptation of the video game “Elden Ring”.

Late last year, Netflix struck a deal to buy Warner Bros.’s movie studio and streaming assets. Discovery, only to be outbid a few months later by Paramount Skydance, which finalized its acquisition of WBD in early October.

Some on Wall Street have speculated that the streamer may be interested in further mergers and acquisitions, including acquiring assets from NBCUniversal after it splits from its parent company. Comcast.

“Rice’s long tenure at Fox, and then at Disney after its acquisition of Fox, gives him unique insight into the consolidation of two major studios, relevant if Netflix chooses to go after another studio,” Alicia Reese, senior vice president of equity research at Wedbush, wrote in a research note Thursday. “Even if that’s not the case, Rice’s experience fits well as Netflix moves deeper into film and builds a broader platform with diverse content across the entertainment ecosystem.”