Netflix Chief Marketing Officer to Exit

Chief marketing officer Kelly Bennett is leaving Netflix, the company announced.

He “has decided to step down from the company after seven successful years in the role” and will stay for a transitional period until a new chief marketing officer is named, according to a Netflix release.

Bennett joined Netflix in 2012 and has led the company’s marketing efforts as it grew from 26 million to more than 139 million paid members around the world, according to the release.

“He’s been instrumental in helping to make Netflix a much loved brand — and pioneered the company’s campaigning approach to the launch of its original content,” the release stated.

“Kelly Bennett has been absolutely transformational for us as we expanded our member base in the U.S. and globally, and particularly as we transitioned into being a leader in original series and films,” said Reed Hastings, Netflix CEO, in a statement. “He has been a source of inspiration both inside Netflix and in presenting our brand to the world, and we are thankful for his enormous contributions.”

“The past seven years have been the most rewarding of my professional life, and we are at the top of our game, which is why this was the right moment for me to retire,” said Bennett in a statement. “I am immensely proud of the team we have built and all that has been accomplished during my time here — and I will continue to be Netflix’s greatest fan.”

Video Game Industry Eyes Direct-to-Consumer Rewards — and Risks

Taking a cue from the subscription streaming video-on-demand ecosystem, the video game industry has quietly begun offering content to consumers online rather than solely through packaged-media retailers such as GameStop, Best Buy and Target.

Last May game publisher Electronic Arts acquired the cloud gaming technology assets and personnel of a wholly owned subsidiary of GameFly — the online packaged-media rental service that also offers movies and TV shows.

Specifically, EA aims to distribute its games to consumers online without paying license fees to third-party game platforms such as Xbox, PlayStation and Nintendo. At last year’s at annual E3 gaming confab, EA bowed a prototype subscription online gaming platforms EA Access and Origin Access.

“Cloud gaming is an exciting frontier that will help us to give even more players the ability to experience games on any device from anywhere,” Ken Moss, chief technology officer at Electronic Arts, said at the time.

Sony, whose five-year-old subscription gaming service – PlayStation Now – features hundreds of catalog games for $99 annual fee, is reportedly considering direct-to-access for new releases following its purchases of online platforms Gaikai and OnLive.

“The greatest disruption of entertainment is the combination of streaming and subscription,” Andrew Wilson, CEO of Electronic Arts, told Fortune. “More people are engaging, with less friction, through cloud-driven services.”

At the same time, offering consumers online access to hundreds of games for annual or monthly fees (the latter without contract) threatens an established retail market where game publishers often charge and get more than $50 for a single game.

Subscribe HERE for FREE Daily Newsletter!

“I do believe that some subscribers might cancel after finishing the newest game they wanted to play, but the vast majority will keep their subscription because of the online multiplayer component of those same games,” said Greg Potter, an analyst with Kagan, a media research group within S&P Global Market Intelligence. “Publishers are okay with this model because hit games often have multiple revenue streams other than the purchase at the point-of-sale.”

Indeed, the gaming industry saw revenue reach record $43.8 billion in 2018, up 18% from 2017. That figure dwarfed the global box and SVOD markets.

The latter has Netflix CEO Reed Hastings worried.

In the SVOD pioneer’s recent shareholder letter, Hastings said Netflix controlled about 10% of domestic TV screen time – a tally he said is under threat more from online gaming than other SVOD competitors.

“We compete with and lose to [online gaming service] ​Fortnite ​more than HBO Now,” Hastings wrote. “When YouTube went down globally for a few minutes in October, our viewing and signups spiked for that time. Hulu is small compared to YouTube for viewing time. Our focus is not on Disney+, Amazon [Prime Video] or others, but on how we can improve our experience for our members.”

 

 

Netflix Tops 5 Million Subs in France

After fits and starts, Netflix has reportedly exceeded 5 million subscribers in France — five years after launching service largely to indifferent consumers, according to publication Les Echos.

 The publication cited comments from Netflix co-founder/CEO Reed Hastings, who was in Paris recently to announce the opening of a company office staffed by 20 employees.

The benchmark is impressive considering Netflix reported 3.5 million subs last September. Since then, the SVOD pioneer has pledge to double local content production. It has also attempted to bridge a divide with the French movie industry, notably the Cannes Film Festival regarding theatrical windows.

 The publication said French media pay-TV/SVOD platform Canal+ still exceeds Netflix in average monthly revenue per subscriber (€40) compared to €12 for Netflix.

French households now spend 1% – 2% of their TV viewing with Netflix, compared to 10% in the United States. About 1.7 million people in France watch Netflix and other video-on-demand services daily (including 60-70% Netflix) in prime time, according to an NPA Conseil study.

Les Echos said Canal+plans to launch a less expensive SVOD service with localized content to up competition with Netflix. In addition the service has the ability to license American TV shows such as “Billions” and “The Affair,” as Showtime does not distribute internationally.

“Even though it has reached the 5 million subscriber mark in France, Netflix probably still has a real growth reserve,” wrote Les Echos.

Netflix Posts Record Q4 Subscriber Growth

Netflix Jan. 17 reported it added 7.3 million net new paid subscribers internationally in the fourth quarter (ended Dec. 31, 2018) — which was above company projections of 6.1 million. In the United States, Netflix added 1.53 million paid subs, compared to projections of 1.5 million.

Netflix no longer combines new subs on trial basis with paid additions. As a result, Netflix said it had 2.07 million new trial subs in the U.S., in addition to 7.13 million internationally.

The service ended the period with 139 million paid subscribers, up 9 million paid members from the start of the quarter and 29 million from Jan. 1, 2018. Netflix added 22 million subs in 2017.

The SVOD pioneer grew quarterly revenue 35% to $16 billion, nearly doubling operating income to $1.6 billion.

Netflix said that through its first four weeks, original movie Bird Box, starring Sandra Bullock, was streamed by more than 80 million household worldwide.

The service said its original feature films continue to generate audiences in the home and in theaters. Five weeks after its debut, Roma from director Alfonso Cuaron is still playing on 900 screens worldwide — including some 70mm format projections.

Netflix said it service commands about 10% of all TV screen time in the U.S., and about half as much on mobile devices.

“There are thousands of competitors in this highly fragmented market vying to entertain consumers,” wrote CEO Reed Hastings and CFO Spencer Neumann in the investor letter. “Our growth is based on how good our experience is to subscribers … not on Disney+, Amazon Prime Video or others.”

Finally, Netflix ended the period with 2.7 million disc renters — down from 3.3 million during the previous-year period. The legacy segment generated $51.4 million operating profit on revenue of $85.1 million. That compared to operating profit of $62.6 million and revenue $105.1 million last year

Netflix Unveils Executive Pay for 2019 — and Hastings’ Salary Isn’t the Highest

In the coming year, Chief content officer Ted Sarandos will get the top salary — $18 million — and CEO and chairman of the board Reed Hastings will garner the most stock options — 30.8 million, Netflix announced in an SEC filing on its executive compensation.

Hasting’s salary is a mere $700,000 (the same as in 2018), as the executive is taking most of his compensation in stock options. Sarandos will pick up 13.5 million stock options. In the end, Hastings and Sarandos should make about the same in salary and options.

Still, Sarandos’ salary jumped considerably. His salary for 2018 was $12 million with 14.25 million options.

Chief product officer Greg Peters will have a salary of $10 million (up from $6 million in 2018), with 6.8 million options.

Among the other executives, CFO David Wells and general counsel and secretary David Hyman will each earn $3.5 million in salary (roughly a $1 million raise for both from 2018). Wells garners 2.8 million options, with Hyman getting 3.85 million.

Jeff Bezos: ‘Amazon Not Too Big to Fail’

With a market cap approaching $800 billion, and fresh off a well-publicized search for a second corporate headquarter that saw hundreds of cities and local governments outbid each other with billions in incentives, Amazon’s perch atop the retail/e-commerce food chain would appear eternal.

Not so, according to founder/CEO Jeff Bezos, who, when reportedly asked about the burgeoning growth of the company and its ramifications in a staff meeting at the Seattle headquarters, said Amazon would one day perish.

“Amazon is not too big to fail,” said Bezos, according to a recording of the Nov. 8 meeting obtained by CNBC. “In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.”

Bold talk considering Amazon has generated more than $7 billion in profit and $160 billion in revenue in just nine months this year. The company remains one of the largest retailers of packaged and digital media.

And despite spending billions on original content, Amazon continues to promote the “free” Prime Video streaming video service largely as a loss-leader marketing tool – a strategy that unnerves Netflix co-founder/CEO Reed Hastings.

“They are so scary,” Hastings told CNBC in a separate interview last year. “Everything Amazon does is so amazing. How are they doing so many business areas so well? We are continuing to watch them and be impressed with them.”

The company has more than 600,000 employees globally, with plans to add 50,000 more between new co-headquarters in Arlington, Va., and Queens, N.Y.

Amazon is also adding 5,000 employees to a tech center in Nashville, Tenn.

But Bezos warned that failure often follows companies that become more involved with their image than the needs of their customers.

“That will be the beginning of the end,” Bezos said. “We have to try and delay that day for as long as possible.”

But as CNBC learned talking to some Amazon employees, internal image is not what concerns most staffers. Instead, government regulation and antitrust issues do.

Indeed, the European Union and Japan are separately looking into antitrust issues involving Amazon merchant data. In the United States, President Trump has long voiced concern about Amazon’s relationship with the U.S. Postal Service, taxes, impact on small retailers and other issues.

Some observers contend Trump’s apparent animus against Amazon is largely fueled by the fact that The Washington Post, which is owned by Bezos, often criticizes the president and his policies in print and online.

 

Report: Netflix Lower Pricing Would Target Mobile Users

Netflix generated significant media attention after CEO Reed Hastings told Bloomberg the SVOD behemoth was testing lower-priced subscriptions in select markets, including Asia.

An updated report from TechCrunch reveals the lower-priced plans would be limited to mobile users — a demo that represents less than 30% of Netflix total subscribers.

A Netflix representative confirmed the existence of ongoing tests in Malaysia, which include slashing the basic mobile-only plan price to $4 (RM17) from $7.90 (RM33).

Meanwhile, Hastings separately told an Indian website the service had no plans to reduce conventional (TV subscription) pricing in India or anywhere else.

Netflix is investing heavily in original Indian programming, including the recent launch of Mumbai mob drama, “Sacred Games,” the service’s first original content in India.

“‘Sacred Games’ was a great Indian story,” Ted Sarandos, chief content officer at Netflix, told Livemint.com. “It wasn’t something we tried to make for the world, we made it for India and believed if it did well, it would travel. It was a reinforcement of that belief more than anything else.”

The platform is planning 11 feature-length movies and 11 streaming series in India in 2019.

 

 

Netflix Clarifies Subscriber Growth Projections

Coming off a record fiscal third quarter in subscriber growth, Netflix is again sitting pretty atop the global subscription streaming video market with 137 million subs, including 130 million paid.

In the Oct. 16 fiscal interview webcast, co-founder/CEO Reed Hastings reiterated that the platform – going forward – would focus projections on paid subscribers rather than including new subscribers engaged in free trial service.

“We’re getting a little better on the forecasting in particular the evolution to paid net ads,” Hastings said.“So, I think by focusing going forward on paid, we’ll be able to be a little more accurate and focused on the fundamentals.”

The return to “fundamentals” underscores Netflix’s concern about the market’s backlash in the previous fiscal quarter when the service failed to meet Wall Street and its own subscriber growth projections – estimates that included free trials.

“If you look at that paid net ad growth, you can actually see how remarkably steady [we are],” Hastings said.

To sustain subscriber growth in the mature domestic market, Netflix is streamlining growth projections and focusing on bundling the service with pay-TV operators and mobile phone services, including recent deals with T-Mobile and Altice USA.

“There’s still pockets of consumers who – it’s harder for them to get the activation energy to go directly to the website and sign up, but if we can put … a call to action and bundle that the subscription as part of their pay-TV offering or the mobile offering, they can then get right into the service,” said chief product officer Greg Peters.

Globally, Netflix’s sub growth projections remain relatively unlimited for the near future. Much of that due to the service’s burgeoning presence in India – a country with more than 300 million mobile phone subscriptions.

“A couple hundred million people watching content through the Internet in India is a really exciting idea,” said CCO Ted Sarandos.

 

Rachel Whetstone Named New Netflix Communications Boss

Netflix Aug. 27 named Rachel Whetstone as its new chief communications officer, replacing Jonathan Friedland, who was reportedly fired for “unacceptably low racial awareness and sensitivity” following separate uses of the racist “N-word” in company meetings.

Whetstone is responsible for leading communications on a global basis, having held similar positions at Facebook, Uber and Google.

“Rachel is a proven communications leader and a strong addition to the Netflix team,” CEO and co-founder Reed Hastings said in a statement. “Her deep knowledge and international expertise will be invaluable as we bring Netflix and its expanding lineup of original content to an increasingly global audience.”

A graduate of Bristol University, Whetstone worked as a political advisor in the U.K. before entering the private sector. She joined Google in 2005 and served as SVP of communications and public policy at Google from 2010 to 2015. She held the same position at Uber from 2015 till 2017, prior to joining Facebook as a VP of communications last year.

 

CFO David Wells Leaving Netflix

Netflix Aug. 13 announced that CFO David Wells plans to step down after helping the company choose his successor. The search will include both internal and external candidates. Wells, who joined Netflix in 2004 and has served as CFO since 2010, intends to stay until his successor is found.

“It’s been 14 wonderful years at Netflix, and I’m very proud of everything we’ve accomplished,” Wells said in a statement.

Wells, who has made a small fortune through stock options during Netflix’s meteoric rise, said his next chapter in life will focus on philanthropy.

“I like big challenges, but I’m not sure yet what that looks like,” he said.

“David has been a valuable partner to Netflix and to me. He skillfully managed our finances during a phase of dramatic growth that has allowed us to create and bring amazing entertainment to our members all over the world while also delivering outstanding returns to our investors,” said co-founder/CEO Reed Hastings. “I look forward to working with him during the transition as we identify a new CFO who will help us continue to pursue our ambitious goals.”