Netflix slowdown has multiple factors, CEO says

Benoit Berthelot

Netflix Inc.’s co-chief executive officer is blaming a recent slowdown at the streaming service on multiple factors including inflation’s impact on household budgets, a decline in smart TV sales due to supply chain constraints, and its departure from Russia.

“Every customer is asking the question of the value of a subscription in relation to its cost,” Ted Sarandos said in an interview with French newspaper Le JDD on Sunday. Netflix’s vision to “satisfy the consumer” remains intact, he added, citing the popularity of the new season of “Stranger Things.”

Gaten Matarazzo, Finn Wolfhard and Sadie Sink in "Stranger Things."

Netflix, which lost 200,000 subscribers in the first quarter, has been trying to bring costs under control. As part of those efforts, the streaming giant has laid off employees, including 150 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.

The introduction of ads will be global and make Netflix’s business model more complex, the co-CEO said, but will allow the company to attract customers who want to pay less.

Netflix now has more than 10 million subscribers in France, Sarandos said, compared to 6.7 million in 2020, the last time it 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.

Still, Sarandos criticized an exclusivity arrangement with local cinema guilds that allows Netflix to show films only 15 months after their theater release in France.

“The appropriate time frame is a few weeks, not a few months,” he said.