Netflix Reportedly Lays Off Staff Members Due to Shift in Marketing Strategy [Updated]

     January 30, 2020

new-netflix-logo-slice

“Is it on Netflix?”

You’ve heard this question before; you’ve probably asked it yourself. If it’s on broadcast, On Demand, or in theaters, people will ask, “Is it on Netflix?” Anecdotally speaking, even audience members watching other streaming service’s content–on the actual streaming service itself–have been heard to exclaim, “This is great! Is it on Netflix?” The reigning ruler of streaming services doesn’t have a brand recognition problem, though it may have a brand identity problem.

And that’s what makes the company’s new marketing strategy even stranger. Reportedly, according to THR, Netflix will be laying off some staff members, anywhere from 15 to who knows how many of their roughly 7,000 employees. Maybe that’s just downsizing, excess reduction, workforce efficiency optimization, whatever you want to call it, or maybe it’s a feature (not a bug) of Netflix’s internal review policy. But if the report has some truth to it, it’s probably a combination of things, including the emergence of strong streaming competitors like Disney+, HBO Max, and Peacock, and continued pressure from Amazon and Disney-owned Hulu.

sandra-bullock-bird-box

Image via Netflix

But there’s the personal wrinkle to the whole thing, too. Jackie Lee-Joe, Netflix’s new chief marketing officer, who came over from BBC Studios last summer after Kelly Bennett‘s retirement, is looking to restructure the marketing team and its approach. A dust-up like this is a pretty common tactic for newly integrated executives, but there are rumblings that Lee-Joe would like to scale back the nearly $2 billion the company paid out in advertising in 2018; 2019 likely saw similar expenditures. And then there’s Netflix’s recent quarterly earnings report, boasting a 20% international subscriber increase to 167 million members, but slowed growth domestically, adding only 550,000 paid subscribers in the U.S. and Canada. That’s basic economics since this region is the most saturated, but it seems that top-down pressure may be demanding changes to stimulate that growth for the next quarter, and the marketing team seems to be shouldering that burden.

What makes less sense is the focus on the brand over talent and titles. Top-tier Hollywood talent has flocked to the spend-happy Netflix in recent years; $15 billion for higher-than-usual upfront fees and a boosted international content library will do that for you. (I highly doubt the costs “saved” from the 15 or so employees now liberated from their Netflix duties will make even a blip on that fiscal radar.) [Update: A Netflix spokesperson provided us with the following by way of clarification: “We are absolutely committed to title marketing.” So it seems like the strategy shift isn’t away from titles and/or talent and towards general branding, it’s a multi-pronged approach. My original write-up continues as follows.] The smart move would be to continue to spotlight individual stars and awards-worthy / award-winning titles while also developing a brand identity to go along with their successful brand recognition. You know what you’re getting with anything “Disney” but Netflix has become a catch-all for streaming content. That’s not a bad thing, the marketing team just needs to better shape and hone what they want “Netflix” to mean.

This may be the first indicator that Netflix is gaining a sense of fiscal responsibility. Years spent covering the DVD rental-turned-streaming service has had many of us outsiders scratching our heads as to where the billions upon billions of dollars for content came from since subscriptions alone didn’t account for the burn rate. But now it seems that some accountants have started to tally up the costs and, in the face of slowing growth and increased competition, have suggested that, just maybe, that burn rate was untenable. Stay tuned for more as we hear it.

Tags

Latest News