The party is officially over at Netflix after a disastrous first quarter that saw the far-left streamer lose 200,000 subscribers and predict the loss of 2 million more in the coming months.
Now Netflix is embarking on a course correction that involves reining in spending by cutting spending and cutting new programming, emphasizing “quality” over quantity, according to a report in the The Wall Street Journal.
In some cases, new issue budgets will be reduced by up to 25%.
“Well, she’s a bitch,” co-CEO Reed Hastings reportedly told employees at a town hall meeting this week.
Netflix has spent lavishly over the years to build its streaming empire, borrowing tens of billions of dollars to fund its original content. The new season of the popular science fiction series stranger things costs $30 million per episode to produce, according to the Log.
The Irishmandirected by Martin Scorsese, would have cost Netflix at least $225 million.
The streamer has also thrown obscene amounts of money at top talent to entice them into making Netflix their creative home. Ryan Murphy is estimated to have been paid up to $300 million and is yet to produce a bona fide hit for the company.
Going forward, Netflix will prioritize programs with the biggest return, not the biggest reach, according to the Log. A key internal measure of success will be the ratio of a program’s viewership to its budget.
“We should tailor budgets based on what the creative dictates and the size of the audience,” a Netflix executive told the newspaper.
Netflix is also looking to cut costs when licensing shows it doesn’t own from outside studios and production companies. A studio executive with multiple shows on the streamer told the Log that in some cases, Netflix is looking to cut new show budgets by up to 25%.
Netflix now has to compete with streamers with more resources, including Disney and Amazon. To that end, the company plans to spend more than $20 billion this year on content.