Netflix CEO Ted Sarandos has navigated steep odds before, including the “streaming correction.” But the question facing the company now is acute: whether a builder culture that prizes homegrown content, and which Wall Street loved, is serving it anymore.
After laying off 6% of employees and bouncing both its content chief and head of feature films last week, Netflix reported its third straight quarter of slowing revenue growth Tuesday and acknowledged its stagnating viewership. Its shares fell more than 5% and are down by nearly 40% since April.
Semafor wrote in February, when Netflix walked away from its pursuit of Warner Bros. Discovery, that the company came out battered from an M&A game it had little experience playing. Hiring new creative leaders like Peter Rice, who has strong roots in film, sports, and television, coupled with a pivot to more theatrical releases for its films, may be enough to dig out of its current jam. But perhaps it’s also time to look to M&A again, especially as NBCUniversal spins out of Comcast next year.