Netflix (NASDAQ:NFLX)
After years of spending billions of dollars to make exclusive, original movies for the streaming video behemoth Netflix (NASDAQ:NFLX), may the company be facing the music as a result of these investments?
This possibility surfaced on Friday in the wake of reports that Netflix (NFLX) is reorganizing its film production group, has begun a round of job cutbacks in the division, and is planning to reduce the number of movies it creates each year. As a result, Netflix stock surged.
According to a report published by Bloomberg, to reduce overall spending and place more of an emphasis on producing films of higher quality, Netflix will combine its small- and mid-sized movie production operations, lay off some employees, and slow down the pace at which it creates new movies.
In addition, it has been rumored that two high-ranking executives working in the film operations of the firm would be departing Netflix as part of the new movie strategy. Lisa Nishimura, who supervised Netflix’s documentaries and lower-budget films, and Ian Bricke, vice president of Netflix’s film department, decided to leave the firm after working there for more than a decade each.
Less than a month after Netflix’s All Quiet on the Western Front won four Academy Oscars, news of changes in the company’s film operations broke on the same day as the release of Murder Mystery 2, Netflix’s newest big-name movie created under a contract with actor Adam Sandler.
Netflix has begun introducing new strategies to raise income. One of these strategies involves charging members in some areas an additional price if they share their passwords with others, not in their homes. On Thursday, analyst Steven Cahall from Wells Fargo said that Netflix stock may soon realize profits from the password-sharing initiatives that the company has been doing.
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