Media & Entertainment

Is it cake? No, it’s Netflix’s crumbling subscriber numbers


remote control pointed at Netflix screen
Image Credits: Tumisu / PixaBay (opens in a new window)

Netflix practically admitted during yesterday’s earnings call that there is some tough competition out there and Netflix needs to step up its game. Revenue and subscriber growth have clearly slowed, and content just isn’t hitting the mark.

The company acknowledges this need for improvement. Ted Sarandos, co-chief executive officer and chief content officer, Netflix, said, “Honestly, we’ve got to compete, and we’ve got to continue to improve on the core service, which is making TV series and films and now games that people really love.”

Movies with big names like “Red Notice,” starring Gal Gadot, Ryan Reynolds and Dwayne the Rock Johnson have flashy action sequences and expensive-looking props, but it wasn’t enough to win an Oscar, let alone satisfy subscribers. It’s also alarming that Netflix continues to burn time and money on these big films. “Red Notice” cost $200 million to make and only has a 36% on Rotten Tomatoes… yikes. It’s one of the most expensive movies Netflix has made to date. “The Irishman” is a close second at $150 million.

But quality isn’t synonymous with expensive, and Netflix doesn’t have to spend so much on content if they don’t really need to.

Look at Apple TV+’s “CODA” which cost less than $10 million to make. If a simple and sweet film like “CODA” can win Best Picture without fancy casts and movie sets, then it’s something to note. If Netflix continues to largely focus on A-List cast members instead of quality storylines and content, they’re not going to be able to keep up with their competitors.

On the earnings call, Sarandos also acknowledged that it doesn’t have enough hits coming often enough.

“…We were not happy with the top-line subscriber growth,” he said. “We have to have an ‘Adam Project’ and a ‘Bridgerton’ every month and to make sure that that’s the expectation of the service constantly. So we’re definitely feeling the higher levels of penetration in those markets of users, and we’re definitely feeling a heightened level of competition for sure.”

Choosing this strategy of pushing out hits every month could be overambitious, even for a veteran like Netflix.

While Sarandos added that the company will continue to invest in quality content and bring more variety to the table, if they continue with the strategy they have now — we aren’t quite sure if this will pan out the way they hope. There is some benefit to pacing shows, as other streamers are discovering, to keep users tuning in weekly, instead of just binging and leaving. “Game of Thrones” famously accomplished this for HBO, but now it’s the norm for all sorts of popular series across services.

And while Shonda Rhimes was a great decision for Netflix, bringing valuable shows like “Bridgerton,” which had a viewership of 82 million households in its first 28 days, it could have helped Netflix if it was doled out more slowly. “Inventing Anna,” with 3.3 billion minutes watched for the week of February 14, per Nielsen, could also have benefited from this model.

However, there are other decisions that Netflix has made that didn’t work out as planned.

Netflix’s unscripted series “Is It Cake?” was a miss, receiving a low audience score of 41% on Rotten Tomatoes. The streamer latched on to a trending online meme of cake resembling objects, which is arguably overdone, and rolled with it in hopes to bring more subscriber growth. The show is also too similar to its other wild and experimental cooking titles like “Best Leftovers Ever!,” “Cooked with Cannabis” and “Nailed it.”

“Love is Blind” was another fun show that did really well, especially in the context of the online dating scene with millennials and Gen Z. The show had over 1.4 billion minutes of viewing time the week of February 14, according to Nielsen. But Netflix already has an overwhelming amount of dating shows such as “The Circle,” “Too Hot to Handle,” “Love on the Spectrum” and so on. So the recently released show “The Ultimatum: Marry or Move On” unsurprisingly flopped, receiving a Rotten Tomatoes audience score of 12%.

The point is, just because one show works doesn’t mean subscribers need several others just like it. This formulaic model of programming feels too algorithm-reliant in its decision-making process. Greenlighting quality content requires a human touch.

If the company focused more on acquiring carefully curated titles instead of throwing money at big names and the next big trend, maybe they could rise once again.

More TechCrunch

Dating app maker Bumble has acquired Geneva, an online platform built around forming real-world groups and clubs. The company said that the deal is designed to help it expand its…

Bumble buys community building app Geneva to expand further into friendships

CyberArk — one of the army of larger security companies founded out of Israel — is acquiring Venafi, a specialist in machine identity, for $1.54 billion. 

CyberArk snaps up Venafi for $1.54B to ramp up in machine-to-machine security

Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage…

OpenseedVC, which backs operators in Africa and Europe starting their companies, reaches first close of $10M fund

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

The AI Safety Institute, a U.K. body that aims to assess and address risks in AI platforms, has said it will open a second location in San Francisco. 

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

22 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

3 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

3 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info