The CEO of Netflix said the company’s recent 75 percent stock drop was a ‘horrifying, disappointing and embarrassing’ moment for the streaming platform, which lost lost 200,000 subscribers in the first three months of the year.
The company lost $54 billion in a single day in April after having seen booming success at the height of the COVID-19 pandemic. Netflix is currently trading at $195 per share, as opposed to $348 per share in April.
‘It was horrifying, disappointing and embarrassing,’ CEO Ted Sarandos told The New York Times. ‘We make decisions based on the best information we have at the time. They are not always going to be right, but how you help navigate the outcomes, and the urgency you bring to it, is what gets folks through the storm. And the storms will come.’
The executive, acknowledging how the company added 10 million subscribers in the first three months of lockdown, admitted there were likely ‘a lot of underlying things’ that helped business boom during the pandemic and that Netflix should have evaluated its success more carefully.
‘We could have been much more questioning of the success and saying, ‘Are you sure?’ Sarandos, 57, said.
He also addressed the controversy surrounding comedian Dave Chappelle whose show The Closer came under fire last fall after several woke activists claimed it contained transphobic and homophobic content and called for it to be canned. Sarandos rowed in behind Chappelle and continued to publish the show – triggering a mass exodus of woke workers.
During his interview with the Times, Sarandos yet again defended the choice to support Chappelle saying: ‘I always said if we censor in the U.S., how are we going to defend our content in the Middle East?’
‘We’re all optimistic when we go into these projects,’ Sarandos said of the royals’ project, ‘and sometimes they do or don’t materialize.’
The CEO explained that Netflix, which has signed up several celebrities with no filmmaking experience including Former President Barack Obama and his wife, Michelle Obama, tries to take a chance on new talent, but it doesn’t always pan out.
‘You have to bet early on storytellers,’ Sarandos said. ‘My experience with Barack and Michelle is they are phenomenal storytellers.’
Netflix CEO Ted Sarandos (pictured Friday) said the company’s recent 75 percent stock drop was a ‘horrifying, disappointing and embarrassing’ moment for the streaming platform
The company lost $54 billion in a single day in April after having seen booming success at the height of the COVID-19 pandemic. Netflix is currently trading at $195 per share, as opposed to $348 per share in April
While admitting he was ‘taken by surprise’ at the response to Netflix’ backing of Chappelle, Sarandos noted he did not fret over the situation.
The CEO argued the only way comedians can discover where boundaries lie is by ‘crossing the line every once in a while.’
‘I think it’s very important to the American culture generally to have free expression,’ he said. ‘We’re programming for a lot of diverse people who have different opinions and different tastes and different styles, and yet we’re not making everything for everybody. We want something for everybody but everything’s not going to be for everybody.’
He added: ‘It was an opportunity to take somebody, like in Dave’s case, who is, by all measure, the comedian of our generation, the most popular comedian on Netflix for sure. Nobody would say that what he does isn’t thoughtful or smart. You just don’t agree with him.’
During the controversial Netflix special Chappelle, 48, made a comment stating that ‘gender is a fact’ and joked about the anatomy of transwomen, joking that they lacked real female reproductive organs and they did not have blood but ‘beet juice.’
He also joked that women today view transwomen the same way black people might view white women wearing blackface, and remarked that women are entitled to feel anger toward transwomen, since Caitlyn Jenner won Glamour magazine’s 2015 Woman of the Year award.
Additionally, he stated he does not hate transgender people, and told a long anecdote about a trans woman comic, who he describes as a friend, who came to his defense in earlier entanglements with the community.
The special, released in October, prompted hundreds of Netflix employees to walk out of work in protest, as well as public outrage from the LGBTQ+ community.
Sarandos also addressed the controversy surrounding comedian Dave Chappelle (pictured in April 2018) whose show The Closer came under fire last fall after several woke activists claimed it contained transphobic and homophobic content and called for it to be canned
Despite the special having prompted a walkout by Netflix employees, Sarandos defended the choice to support Chappelle saying: ‘I always said if we censor in the U.S., how are we going to defend our content in the Middle East?’ Protesters are pictured outside Netflix headquarters in Los Angeles in October 2021
In early May in which a man, 23, stormed on stage armed with a knife and tackling the comedian at his Hollywood Bowl show.
Chappelle’s accused attacker, who was hit with a charge of assault with a deadly weapon, claimed he was ‘triggered’ by the comedian’s anti-trans jokes.
A day after the alleged assault, Netflix issued a corporate memo to employees stating: ‘Depending on your role, you may need to work on titles you perceive to be harmful. If you’d find it hard to support our content breadth, Netflix may not be the best place for you.’
The company’s response was reportedly celebrated by several right-leaning media outlets who painted Sarandos as a ‘conservative hero.’
When asked this week how he felt about being hailed in such a light, Sarandos replied: ‘It used to be a very liberal issue, so it’s an interesting time that we live in.’
The CEO also reiterated that standing by Chappelle ‘wasn’t hard’ as the company is a proponent of free expression.
‘And rarely do you get the opportunity to put your principles to the test,’ he added.
Netflix also faced criticisms after Ricky Gervais’ comedy special released on the streaming platform on Tuesday. The show reportedly has similar anti-trans tones that were depicted in Chappelle’s piece.
Sarandos told the Times his comments about Chappelle’s work also apply to Gervais.
Dave Chappelle was attacked on stage while filming a Netflix special in Los Angeles on May 3
Despite the controversies and declining stock prices, Sarandos remains optimistic about Netflix’s future.
‘We’re 90 years behind all of our current competitors in what we do today, and they’re just entering into our space,’ he said, referencing how HBO, Disney and several other major TV and movie producers are joining the digital space.
‘We have to have content that people like better on Netflix than anywhere else. I know it seems like it should be more complicated than that, but it almost isn’t.’
He was also questioned about the company’s choice in green-lighting shows like Emily in Paris – which has been heavily criticized for using ‘outdated’ stereotypes of French people – and whether or not Netflix was more concerned about quantity over quality.
Sarandos defended the firm’s production choices, saying: ‘I don’t think that we’ve done anything so willy-nilly that we should rethink it.
‘While many competitors and pundits talk about volume being a negative, I think it is a tremendous positive for consumers who all have a different view of what ‘quality’ is. I think that, while they kick us around about it, they are starting on the same path — HBO with Discovery programming on the same shelf, Disney broadening their brand with Fox content, and even FX’s radical expansion of output to 22 shows.’
‘I think it’s the trade-off of simplicity and complexity,’ he added. ‘And to do what we did in the last 10 years, I think we benefited much more from simplicity.’
Netflix recently announced 150 layoffs and dropped several shows in development, including projects by Prince Harry and Meghan Markle (pictured in April 2022). Sarandos said Netflix had been ‘optimistic’ about the canceled projects but noted ‘sometimes they do or don’t materialize’
Sarandos defended the company’s decision to back celebrities with new filmmaking experience, saying: ‘You have to bet early on storytellers. My experience with Barack and Michelle is they are phenomenal storytellers.’ Barack Obama is pictured in the trailer for his Netflix nature documentary Our Great National Parks
He was also questioned about the company’s choice in green-lighting shows like Emily in Paris, which has been heavily criticized for using ‘outdated’ stereotypes of French people. He said: ‘I don’t think that we’ve done anything so willy-nilly that we should rethink’
In April, Netflix announced it had lost 200,000 subscribers in the first three months of the year – the first time in a decade their numbers have fallen, and a dramatic reversal of their aim of adding 2.5 million.
Executives also said they expect to lose two million more in the second quarter, and the share price fell significantly, wiping away roughly $70 billion in the company’s market capitalization.
In response, Reed Hastings, Netflix’s co-chief executive, said the company was considering introducing adverts on a cheaper subscription package, and would ‘figure it out over the next year or two.’
Sarandos, during his Times interview, spoke on the advertising option, which the company has so-far resisted.
‘For us, it was all about simplicity of one product, one price point,’ he said, adding: ‘I think it can now withstand some complexity.’
He also argued that while the company needs to reflect on its recent successes and failures, evaluating how it got to the place its in now, it is also not beneficial to spend to long reviewing the failures.
Sarandos believes it is more important to take actions to improve the service.
‘How much time do you spend licking your wounds?’ he said. ‘Let’s have that burned into our memory, but we’ve got to move on and move fast.’
Netflix announced it had lost 200,000 subscribers in the first three months of the year – the first time in a decade their numbers have fallen, and a dramatic reversal of their aim of adding 2.5 million. The company also faces a lawsuit from investors who claim Netflix misled them about subscriber growth in the six months before it reported the loss of subscribers
Meantime, while the company looks to halt its trending declines and seek new growth opportunities, it is also being sued by investors who claim Netflix misled them about subscriber growth in the six months before it reported the loss of subscribers, leading to a plunge in stock price.
The lawsuit, which seeks class action status, was filed in San Francisco federal court alleging that Netflix violated U.S. securities laws by making ‘materially false and/or misleading statements’ and because it ‘failed to disclose material adverse facts about the company’s business, operations and prospects.’
The lead plaintiff ‘Pirani v. Netflix Inc et al’ is Fiyyaz Pirani, a trustee of Imperium Irrevocable Trust, which is a Netflix shareholder, is named in the lawsuit that seeks damages for declines in the company’s share price this year after the company missed its subscriber growth estimates.
The lawsuit was filed just days after Netflix dropped Markle’s animated series as part of a wave of cutbacks prompted by the streaming service’s drop in subscribers.
Filed by a Texas-based investment trust, the lawsuit accused Los Gatos, California-based Netflix and its top executives of failing to disclose that its growth was slowing amid increased competition and that it was losing subscribers on a net basis.
The lawsuit seeks damages for investors who traded Netflix shares between October 19, 2021 and April 19, 2022 – which include ‘compensatory damages’ with an ‘amount to be proven at trial.’