On Tuesday, Netflix reported that its growth had slowed for the fourth quarter in a row.
Netflix sales are still growing, just not at an acceptable rate for Netflix or Wall Street, which is why its shares dropped seven percent on this report, to a two-year low.
Currently, Netflix shares trade at $66.00. That’s nearly 50 percent down from last summer.
“Netflix delivered sales of $12.9 billion in the third quarter, in line with Wall Street’s expectations, and forecast sales of $13.4 billion in the year’s final three months, falling short of what analysts have predicted,” reports Bloomberg. “The pace of growth has fallen from 17.6% in the final quarter of last year to a projection of 11.5% for this year’s fourth quarter.”
“The company blamed its sales shortfall on the advertising business, which is on pace to deliver $300 million less than the company expected.”
But unlike the rest of the entertainment world, Netflix is willing to admit what the real problem is…
Over the past week, Peters and co-CEO Ted Sarandos have overhauled the company’s leadership to address what they see as a decline in programming quality.
Now, I won’t ever give out stock advice, and I would never pour money into a single stock. But an entertainment outlet admitting that it has a quality problem gives me some confidence it can turn things around. This comes with an important caveat I’ll explain below.
Nevertheless, to improve the quality of its product, Netflix fired its longtime Chief Content Officer Bela Bajaria and film chief Dan Lin, who had only been in that role a little over two years.
Netflix is also cutting costs, starting with 1,000 job cuts, which represents six percent of its overall staff.
Currently, at around 7.8 percent, Netflix is number two in the amount of time consumers spend watching the streamer on TV. The problem is that number one, YouTube, is smoking Netflix with a number closer to 14 percent. And that’s not time spent on YouTube via an iPhone or tablet. That’s time spent watching YouTube on TV.
A streamer that mostly produces user content is humiliating a streamer that has spent hundreds of billions producing original content.
That is simply amazing.
I cancelled Netflix a couple of years ago after realizing I spent more time looking for something to watch than actually watching something. Besides, almost everything on Netflix has gay content, and I’m done watching gay stuff. But as a fan of true crime dating back four decades, I can tell you that the true crime programming found on YouTube is much better than the over-produced, overlong true crime shows produced by Netflix.
As far as my caveat…
As far as improving its overall quality that will keep consumers interested, Netflix will have to abandon woke crap, and I’m not sure it has the moral courage to do that. Woke kills quality. Woke not only pushes an agenda, but it also lies about human nature, which makes it impossible to relate to the characters or become engrossed in the story.
