Netflix Replaced Its Chief Content Officer After Its Stock Price Fell 40% Over the Past Year

Netflix has appointed Peter Rice, the former head of Disney Television, as its new chief content officer. He will succeed Bela Badjaria, who has worked at Netflix for nearly 10 years, and will begin his new role on October 26, the company announced. Rice will lead the global content division and oversee scripted and unscripted series, movies, and live events across all regions. According to Business Insider, he will have a budget of approximately $20 billion under his purview.

The reshuffle is intended to halt the decline in Netflix’s stock price —which has fallen 40% over the past year—and to reignite growth in viewership, according to the Financial Times. The day before, Netflix notified its staff of a 6% workforce reduction, or about 1,000 employees. The company hasn’t seen layoffs on this scale since 2022, Reuters notes.

Following the announcement of a change in Netflix’s chief content officer, the company’s stock fell 1.1% in after-hours trading on the Nasdaq, although it had closed the regular trading session in positive territory. On the morning of October 16, during the over-the-counter session on the U.S. Blue Ocean exchange, the decline slowed to 0.9%, according to Yahoo Finance.

Netflix Co-CEO Ted Sarandos acknowledged last month: “Overall, we’re not growing as fast as I’d like, and we’re working to make that happen faster” (as quoted by the FT).

In the first half of the year, Netflix’s viewer engagement increased by only 2%, and YouTube now significantly outpaces it in terms of views on TV screens in the U.S., BI notes. Netflix’s ability to sustain growth is in doubt, and engagement has become a major cause for concern among investors, Reuters reports. Among paid streaming services, Netflix remains the clear leader: according to the latest data, it has more than 325 million subscribers.

Recently, Netflix has been unable to produce blockbuster hits on the level of “Stranger Things” and “Wednesday,” which once helped the company grow, the FT reports. Viewership for new series is declining in their second seasons, and the number of Emmy Awards this year has fallen to a ten-year low, Bloomberg notes. The acquisition of Warner Bros. Discovery—with its library of Hollywood’s most valuable franchises—was seen as the solution to these content problems, but Paramount outbid the streaming giant, the FT notes.

Netflix’s leadership sees Rice as a manager with strong relationships with Hollywood stars and creators, as well as experience managing a broad portfolio of channels and streaming services, according to Bloomberg. At The Walt Disney Company, he served as chairman of Walt Disney Television and head of the entertainment division, and prior to that, he was president of 21st Century Fox, according to a Netflix press release. Under his leadership, “The Simpsons,” “Modern Family,” and “The Bear” were released.

“The loss of Bela Badjaria is a major change, but Peter Rice has a very good reputation in the industry. For us, this is a step forward—or at the very least, a change of course,” commented Wedbush Securities analyst Alisha Rees on the reshuffle. According to her, Rice’s experience is a good fit for Netflix, which is transforming from a streaming service into a platform with more diverse content.

According to Reese, Rice's work on merging Fox and Disney's entertainment assets suggests that Netflix may also look into other acquisitions, such as NBCUniversal, when it becomes available.

The consensus forecast among analysts for Netflix stock remains “Overweight.” Thirty-five analysts recommend buying the stock (with “Buy” and “Overweight” ratings); three months ago, there were 38. The number of “Hold” recommendations has remained unchanged over the quarter at 17. However, two “Sell” or “Underweight” recommendations have appeared, whereas for a long time there were none.

The average target price for Netflix stock is $91.51, which implies a 26% upside from the October 15 closing price.

The company will release its financial results next Tuesday, October 20.

This article was AI-translated and verified by a human editor