Yahoo Finance Netflix (NFLX) Cuts Over 100 Shows to Reduce Programming Costs
Netflix NFLX is keeping no stone unturned to boost its expansion strategies by reducing its output while growing its sales. As part of this strategy, Netflix recently announced cutting more than 100 shows.
This comes after two strikes by writers and actors shut down production across the United States in 2023, and as a result, Netflix released 16% fewer original programs than in 2022. The decline in the company’s total output started in early 2022 and has been declining ever since.
As part of its goal to reduce programming, the company intends to release fewer shows in the future. The company plans to minimize output while increasing sales. Netflix aims to produce 25 to 30 better films per year, instead of about 50 it was making before.
Recently, Netflix canceled several original shows like Sex Education, Firefly Lane, Sex/Life, Human Resources, Welcome to Eden, Shadow and Bone, Dead End: Paranormal Park, Bling Empire, and Bling Empire: New York.
Previously, Netflix has cut some workers and slowed budget growth, but the programming cost cut comes after its competitors began to cut shows, fire employees, and boost sales as part of their expansion strategies.
With these efforts, Netflix strives to provide viewers with a variety of premium content in the near term.
Netflix, Inc. Price and Consensus
Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote
Netflix’s Growing Efforts to Fend Off Competition in The Near Term
This current Zacks Rank #2 (Buy) company is riding on an expanding customer base and a strong portfolio of content, which is expected to drive top-line growth in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past three months, Disney’s shares have returned 29.9% compared with the Zacks Consumer Discretionary 8.7% rise. The growth can be attributed to its growing customer base. Netflix has recently added more than 16 million customers and has planned to add more in the upcoming months.
Netflix has also benefited from its crackdown on password sharing and the launch of a lower-cost, advertising-supported tier.
Netflix holds a better position in the market in the streaming market with a huge subscriber base compared with industry participants like Disney DIS, Warner Bros. Discovery WBD, Comcast’s CMCSA and Paramount. The companies are adopting measures to decrease their cost of production and programming in an effort to drive top-line growth in the near term.
Disney has recently cut more than 50 TV shows and movies like Willow, Big Shot, Pistol, Little Demon, and more from its streaming platforms, Disney+ and Hulu, as part of its cost-cutting measures. It has also fired thousands of employees and reduced its budget by billions.
WBD has also cut shows like Infinity Train, Scoob 2, Westworld, Minx, Batgirl, and more as part of recovering tax write-offs.
To reduce costs, Comcast’s NBCUniversal has recently removed shows like Daily Pop and Nightly Pop and has also laid off around 50 employees across its three divisions, Peacock marketing, NBCUniversal Entertainment, and ad sales.
Netflix intends to bring up more strategies that curtail its costs and, at the same time, benefit its users. Recently, it has been planning to reward binge-watchers with ad-free episodes to boost user retention. Users who view three episodes in a row will receive one ad-free episode.
The Zacks Consensus Estimate for Netflix’s revenues for fiscal 2023 is pegged at $33.60 billion, indicating growth of 6.29% year over year.
The consensus mark for earnings has increased by a penny over the past 30 days to $2.19 per share.
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