Netflix CEO Refutes Claims of Reducing Original Movie Output

Netflix CEO Ted Sarandos has disputed assertions that the streaming giant plans to reduce its original movie output. In a recent earnings call, Sarandos emphasized that Netflix's focus is on improving the quality of its films and catering to the diverse tastes of its global subscriber base, amid criticism of inconsistent quality control.

The explanation comes in response to a New York Times article suggesting that Netflix was shifting away from auteur-driven projects and focusing more on crowd-pleasing, lower-budget films under new film chief Dan Lin. However, Sarandos disputed this claim, stating, "There is no appetite to make fewer films, but there is an unlimited appetite to make better films always."

Sarandos expressed confidence in Lin's leadership and the company's strategy, noting that Netflix remains the market leader and continues to acquire distribution rights from major studios. He explained that the 'audience-centric' strategy under Lin is about diversifying the types of films, not scaling back from artistic interests.

Why this matters: Netflix's commitment to producing a wide range of high-quality original films is vital for maintaining its position as a leading streaming platform. The company's ability to cater to diverse subscriber tastes while addressing concerns about quality control will be key to its long-term success in an increasingly competitive market.

Despite the criticism of inconsistent quality control, exemplified by the poor critical reception of Zack Snyder's 'Rebel Moon' films, Sarandos reiterated that Netflix is not reducing its movie production. Instead, the company aims to improve the quality of its offerings while continuing to provide a diverse range of content to its 260-million subscribers worldwide.

Sarandos also highlighted Netflix's strong performance in the first quarter of 2023, with the addition of 9.3 million subscribers globally and a 15% increase in revenue to $9.37 billion. The company is evolving its revenue model, including the introduction of advertising and extra member features, and will stop reporting quarterly subscriber numbers and average revenue per member starting in 2025.

In addressing the reports of a shift in Netflix's film strategy, Sarandos clarified that there is no intention to reduce the frequency of film releases. He emphasized the platform's commitment to delivering compelling and diverse cinematic experiences, stating, "The goal is to have a lot of movies that thrill our audiences with different tastes." Despite recent organizational changes and layoffs within Netflix's creative film group, Sarandos reiterated the company's focus on improving content quality and tailoring its offerings to the preferences of its global subscriber base.

Key Takeaways

• Netflix CEO disputes claims of reducing original movie output, aims to improve quality.
• Netflix's strategy under new film chief Dan Lin is to diversify film types, not scale back.
• Netflix remains committed to producing a wide range of high-quality original films.
• Netflix added 9.3M subscribers globally in Q1 2023, with 15% revenue increase to $9.37B.
• Netflix will stop reporting quarterly subscriber numbers and ARPU starting in 2025.