Netflix enters Tuesday, October 20 earnings with its creative bench cleared and its stock under pressure. Roughly 1,000 staffers were let go in the past week, and two of co-CEO Ted Sarandos’ top lieutenants—chief content officer Bela Bajaria and film chief Dan Lin—have been removed.
The new structure
Peter Rice, the former Disney and Fox executive, takes over Bajaria’s content remit. Netflix has not named Lin’s successor, leaving the film team’s shape open for now. For Sarandos, the reset removes the last obvious layer of creative-side blame. With both major lieutenants gone, the spotlight moves directly onto him.
The stock explains Wall Street’s impatience. Netflix trades below $70, down from above $120 a year ago. The shares had already disappointed after Netflix lost the Warner Bros. Discovery film business to Paramount, despite a multibillion-dollar kill fee.
Why the timing matters
The leadership reset lands the day before Netflix reports. Wedbush expects ad revenue to double to roughly $3 billion in 2026 and carries a 12-month price target of $90. That is the bull case: advertising becomes a more predictable growth engine while engagement bets mature. The nearer-term risk is that Wedbush itself cautions engagement changes will take time—especially amid the staff upheaval.
Sarandos has been here before
Netflix has recovered from worse-looking moments. In 2011, the Qwikster plan to split DVDs from streaming was reversed within a month. In April 2022, Netflix reported its first subscriber loss of roughly 200,000, then lost nearly another million the following quarter. The response—a password-sharing crackdown and a cheaper ad tier—helped Netflix grow past 300 million subscribers, to the point it no longer reports quarterly additions.
Sarandos describes the operating principle as having “no sacred cows.” That flexibility is visible in the current playbook:
- Podcast deals with Spotify, Barstool Sports, iHeartMedia and Jay Shetty’s “On Purpose” within the last 12 months.
- Sports bets including another NFL package, international World Cup rights and select MLB games.
- Kids programming shifted toward “Sesame Street” and “Ms. Rachel,” dropping “CoComelon,” with a “Sesame Street” film planned.
- A 30-minute gameplay trailer for “Grand Theft Auto VI,” aimed at gaming audiences that usually gather on X or Twitch.
The symbolic prize
Netflix is still chasing a Best Picture Oscar, and “La Bola Negra” may be its strongest shot yet. A win would not fix the stock by itself, but it would signal that Netflix’s adult films can capture the zeitgeist—and that Sarandos still has levers to pull. If the current levers fail, there is no DVD business to fall back on this time.
For media buyers and platform watchers, the call is less about one quarter and more about whether Netflix can show a credible ad ramp while it repairs engagement. The leadership churn makes that story harder to sell in the short term, even if the revenue forecast points up.
Source: IndieWire
