Netflix is reorganizing its executive leadership to address engagement issues.
On Thursday, the streaming giant announced that former Disney executive Peter Rice will become the company’s chief content officer, overseeing a global content organization that includes scripted and unscripted series, movies, and live events.
Rice replaces Bela Bajaria, a 10-year Netflix veteran. Bela Bajaria most recently led the company’s global content team, focusing on live sports strategy. Bajaria was originally hired in 2016 to help the streamer launch its unscripted division, as well as licensing and studio co-productions. She then moved on to head creative, spearheading Netflix’s $20 billion content budget.
She has directed popular TV series such as “Stranger Things,” “Wednesday,” “Bridgerton,” “The Squid Game,” “Adolescence,” and “Beef,” as well as Netflix movies such as “Frankenstein” and “KPop Demon Hunters.” Bajaria also helped push Netflix into live sports and events, including deals with WWE and the NFL and shows like “The Roast of Tom Brady.”
Prior to working at Disney, Mr. Rice served as president of 21st Century Fox, CEO of Fox Networks Group, and lead officer on Fox’s Hulu board of directors. He was also president of Fox Searchlight Pictures, where he helped release Slumdog Millionaire, Juno, Little Miss Sunshine, and Sideways.
Peter Rice, pictured on May 3, 2017, was head of Disney’s television entertainment business in 2020. He was one of several executives who were replaced as CEO in favor of Capek.
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The executive changes come after a tumultuous period for Netflix as it faced declining viewership and searched for a path to growth. This comes just days after the streaming giant laid off about 1,000 employees, representing 6% of its workforce.
The last time Netflix made cuts of this magnitude was in 2022, when it reported its first quarterly subscriber decline in more than a decade.
“We believe these job cuts reflect structural changes in the cost base rather than a response to near-term subscriber trends,” Brian Pitts, managing director and head of Internet Interactive Entertainment Equity Research at BMO Capital Markets, said in a research note published Friday.
Flagging engagement
In July, Netflix reported that viewership was up just 2% in the first half of this year, with the streamer suffering from a lack of shows with watercooler-level hype.
Co-CEO Ted Sarandos acknowledged last month at the Bloomberg Screen Time conference that the company “isn’t growing as fast as I would like it to.”
With these warnings and Mr. Bajaria’s exit, Wall Street is bracing for more turmoil to come.
“Mr. Bajaria’s sudden departure likely signals that user engagement may have remained weak throughout (the third quarter),” Pitts wrote.
Netflix is scheduled to report third-quarter results on Tuesday.
In July, Nielsen reported that Netflix accounted for 7.8% of TV viewers, while YouTube accounted for nearly double that at 14.2%.
YouTube poses Netflix’s biggest threat in the battle for viewing time. In response, streaming giants have sought to diversify their content in recent years, expanding into live sports, documentaries and video games to compete for a share of consumer attention.
“If there is an opportunity to transform[Netflix]into a broader content hub, there is a risk of missing out on watercooler originals,” Wells Fargo equity analyst Stephen Cahall said in a research note last month. “We believe a breakout hit is essential for stocks to work again.”
What Rice brings to Netflix
Mr. Rice has extensive television and film experience, most recently serving as chairman of Walt Disney Television and chairman of the company’s general entertainment division. He managed a wide range of channels across broadcast and streaming, including ABC, Disney Channel, Hulu and FX Networks. During his tenure, he oversaw the production of more than 300 shows, including “American Idol,” “Modern Family,” “Abbott Elementary,” “The Bear,” “Only Murders in the Building,” and “Shogun.”
He also led coverage of major sporting events such as the Super Bowl, NBA Finals, and FIFA World Cup.
Under Rice’s leadership, Disney earned nearly 300 Primetime Emmy Award nominations in 2021-2022. Of those, it won nearly 60 awards across television networks and streaming platforms.
Meanwhile, Netflix’s Emmy wins have slowed.
Samuel Boivin | Null Photo | Getty Images
In 2021, the station won 44 trophies, tying the record for the most trophies won in one year. However, this year it only won 16 awards, the lowest number of Emmy wins in 10 years.
Along with Rice, Netflix also gains an executive with theatrical experience. After being fired by then-Disney CEO Bob Chapek in mid-2022, he transitioned into an independent producer role. Since 2023, he has been producing films such as “Saturday Night” and “28 Years Later.” He is currently developing a film version of the video game Elden Ring.
Late last year, Netflix struck a deal to buy Warner Bros. Discovery’s movie studio and streaming assets, but months later it lost out to Paramount Skydance, which completed its acquisition of WBD in early October.
Some on Wall Street have speculated that the streamer may be interested in further M&A, including acquiring assets from NBCUniversal, which it spun off from its parent company. comcast.
“(Rice’s) years of work at Fox and then Disney following the acquisition of Fox provides unique insight into the integration of two major studios, which would be relevant if Netflix chooses to pursue another studio,” Alicia Reese, senior vice president of equity research at Wedbush, said in a research note Thursday. “Even if it doesn’t, Rice’s experience will be a good fit as Netflix moves further into theaters and builds a broader platform with diverse content across the entertainment ecosystem.”
