Netflix sees 90% of TV viewing as untapped potential
CANNES, France — Netflix continues to project confidence despite a downshift in its business.
Why it matters: Investors have been abandoning the stock as conditions which propelled stay-at-home stocks disappear. But co-CEO Ted Sarandos said they have been here before.
Driving the news: "We've gone through these experiences where the market disconnects from the core business and you have to prove to the market that the thesis still works and the thesis is going to work long term," Sarandos said on stage today at the Cannes Lions advertising festival.
- And despite having spent the past decade-and-a-half in streaming, he still sees Netflix as being in the early days of the format's popularity.
- "Today we’re about 10% of what people do on TV … [There's] a lot of room to grow," he said.
Yes, but: That growth isn't guaranteed.
- Netflix is readying to launch an ad-supported option by as early as the end of the year to combat slowing user growth.
- On Thursday, Variety also reported the company is laying off about 300 people, mostly in the U.S. It's the second round of cuts in the past two months.
- And fast-moving competition from the likes of Disney+ and Apple TV+ is pushing "the bar for great content" higher, said Sarandos.
What they're saying: "The content itself is working in the way that people want to see us working," he said.
What to watch: What's slowing down growth are macroeconomic issues that the company could have foreseen had the pandemic recovery been slower, he added.