A former Netflix executive has publicly analyzed the company's fourth-quarter results, highlighting a 7% subscriber decline and $2.3 billion in content expenses, while urging a shift toward high-impact original programming.
- Netflix lost 1.8 million subscribers in Q4, reducing total membership to 267 million
- Content expenses reached $2.3 billion, representing 40% of operating costs
- Only 12 original titles exceeded 50 million weekly viewing hours
- Stock dropped 9% in after-hours trading following earnings release
- Exec recommends cutting content spend by 15% and prioritizing data-driven development
- Competitors including Amazon Prime Video and Disney+ are gaining traction via cost-efficient content strategies
The former Netflix executive emphasized that the company’s Q4 performance reflected growing challenges in sustaining subscriber growth amid rising competition. The report revealed a net loss of 1.8 million subscribers, bringing total global membership down to 267 million—a reversal from previous growth trends. This marks the third consecutive quarter of subscriber deterioration, raising concerns about long-term retention strategies. Content spending remained elevated at $2.3 billion for the quarter, accounting for nearly 40% of overall operating expenses. Despite this investment, only 12 new titles achieved over 50 million hours viewed per week, indicating a mismatch between budget allocation and audience engagement. The executive noted that streaming success now hinges on quality differentiation, not quantity, pointing to shows like 'Wednesday' and 'Squid Game' as benchmarks for effective storytelling and cultural impact. Market reaction followed closely, with Netflix shares dropping 9% in after-hours trading. Investors are increasingly concerned about profitability, especially as rivals like Amazon Prime Video and Disney+ expand their content libraries with lower production costs and strategic licensing deals. Analysts estimate that Netflix must reduce content spend by at least 15% in 2026 to stabilize margins without sacrificing viewership. The executive stressed that reevaluating acquisition strategies—particularly for international franchises—and investing more in data-driven development could help realign priorities. With global competition intensifying and consumer attention fragmented across platforms, the call is clear: innovation in content curation may be as vital as investment in production.